Catalent Inc (CTLT)
Cash ratio
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 289,000 | 280,000 | 449,000 | 896,000 | 953,000 |
| Short-term investments | US$ in thousands | 109,000 | 89,000 | 89,000 | 71,000 | 200 |
| Total current liabilities | US$ in thousands | 1,031,000 | 1,530,000 | 1,098,000 | 1,196,000 | 893,000 |
| Cash ratio | 0.39 | 0.24 | 0.49 | 0.81 | 1.07 |
June 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($289,000K
+ $109,000K)
÷ $1,031,000K
= 0.39
The cash ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations using available cash.
Looking at the trend in Catalent Inc's cash ratio over the past five years, we observe a decline from 1.07 in 2020 to 0.28 in 2024. This decline indicates a reduction in the company's ability to cover its short-term liabilities solely with cash and cash equivalents.
The significant drop in the cash ratio from 2020 to 2024 suggests potential challenges in managing liquidity effectively. A cash ratio of 0.28 in 2024 means that Catalent Inc holds $0.28 in cash and cash equivalents for every $1 of current liabilities, reflecting a lower liquidity position compared to previous years.
It is important for Catalent Inc to closely monitor its cash management practices and explore ways to improve liquidity in order to ensure its ability to meet short-term obligations without relying heavily on external financing.
Peer comparison
Jun 30, 2024