Darling Ingredients Inc (DAR)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 1,855,670 | 1,638,100 | 1,089,010 | 986,994 | 917,288 |
| Total current liabilities | US$ in thousands | 998,137 | 1,068,440 | 752,684 | 675,305 | 688,339 |
| Current ratio | 1.86 | 1.53 | 1.45 | 1.46 | 1.33 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $1,855,670K ÷ $998,137K
= 1.86
The current ratio of Darling Ingredients Inc has shown a generally increasing trend over the past five years, which indicates an improvement in the company's liquidity position. As of December 31, 2023, the current ratio stands at 1.86, reflecting that the company has $1.86 in current assets for every $1 in current liabilities. This suggests that Darling Ingredients Inc has a relatively strong ability to meet its short-term obligations using its current assets.
The consistent upward trend in the current ratio from 2019 to 2023 implies that the company has been effectively managing its current assets and liabilities. A current ratio above 1 indicates that the company has more current assets than current liabilities, which is generally seen as a positive sign of financial health and liquidity.
It is important to note that while a current ratio above 1 is generally considered favorable, an excessively high ratio could indicate an inefficient use of assets, such as having too much cash tied up in low-yielding investments. Therefore, it is crucial for Darling Ingredients Inc to strike a balance between maintaining a healthy current ratio and optimizing asset utilization to maximize profitability.
Peer comparison
Dec 31, 2023