Donaldson Company Inc (DCI)
Cash ratio
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 232,700 | 187,100 | 193,300 | 222,800 | 236,600 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 782,500 | 756,400 | 629,600 | 606,600 | 406,800 |
| Cash ratio | 0.30 | 0.25 | 0.31 | 0.37 | 0.58 |
July 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($232,700K
+ $—K)
÷ $782,500K
= 0.30
The cash ratio of Donaldson Company Inc has shown a decreasing trend over the past five years, starting at 0.58 in July 2020 and dropping to 0.30 in July 2024. This ratio indicates the company's ability to cover its short-term liabilities with its current cash and cash equivalents.
A cash ratio of 0.30 in July 2024 suggests that for every dollar of short-term liabilities, Donaldson Company Inc only has $0.30 in cash and cash equivalents available. While this ratio has decreased over the years, it is important to note that a cash ratio of 0.30 still indicates that the company may potentially face liquidity issues in meeting its immediate financial obligations.
It would be advisable for Donaldson Company Inc to closely monitor its cash management practices and potentially consider strategies to improve its liquidity position to ensure it can efficiently cover its short-term liabilities.