Calavo Growers Inc (CVGW)
Cash ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 2,091 | 2,060 | 1,885 | 4,055 | 7,973 |
| Short-term investments | US$ in thousands | — | — | — | 23,197 | — |
| Total current liabilities | US$ in thousands | 81,746 | 101,953 | 114,624 | 106,331 | 90,629 |
| Cash ratio | 0.03 | 0.02 | 0.02 | 0.26 | 0.09 |
October 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,091K
+ $—K)
÷ $81,746K
= 0.03
The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. Calavo Growers, Inc's cash ratio has shown fluctuations over the past five years. In 2023, the cash ratio improved to 0.38 from 0.23 in 2022, indicating a stronger ability to meet short-term obligations with cash on hand. This increase suggests an enhanced liquidity position and a lower reliance on current assets other than cash to meet current liabilities. However, compared to 2020 and 2019, when the cash ratio was 0.19 and 0.27 respectively, the 2023 ratio is still relatively higher. Although the cash ratio has fluctuated, a higher cash ratio generally indicates a more favorable liquidity position and the ability to handle short-term obligations. Consequently, Calavo Growers, Inc's cash ratio in 2023 reflects improved short-term liquidity compared to previous years.