Carter’s Inc (CRI)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	412,926	351,213	211,748	984,294	1,102,320
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	508,816	511,862	528,949	717,231	792,532
Cash ratio		0.81	0.69	0.40	1.37	1.39

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($412,926K + $—K) ÷ $508,816K
= 0.81

The cash ratio of Carter’s Inc, a measure of the company's ability to cover its short-term liabilities with cash and cash equivalents, has displayed fluctuations over the years. As of December 31, 2020, the cash ratio was 1.39, indicating that the company had $1.39 in cash and cash equivalents for every $1 of current liabilities.

However, this ratio decreased to 1.37 by December 31, 2021, and further declined significantly to 0.40 by December 31, 2022. This substantial decrease may raise concerns about the company's liquidity position and its ability to meet its short-term obligations with available cash resources.

Carter’s Inc made some improvement by increasing the cash ratio to 0.69 by December 31, 2023, and further to 0.81 by December 31, 2024. Although these numbers show an improvement in liquidity compared to 2022, the cash ratio still remains below 1, suggesting that the company may need to enhance its cash position to comfortably cover its short-term liabilities.

In conclusion, the cash ratio trend of Carter’s Inc highlights the importance of closely monitoring the company's liquidity position and managing its cash resources effectively to ensure its ability to meet short-term financial obligations.