DR Horton Inc (DHI)

Cash ratio

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cash and cash equivalents	US$ in thousands	3,873,600	2,540,500	3,210,400	3,018,500	1,494,300
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	69,200	60,100	51,000	44,100	40,100
Cash ratio		55.98	42.27	62.95	68.45	37.26

September 30, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($3,873,600K + $—K) ÷ $69,200K
= 55.98

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. D.R. Horton Inc.'s cash ratio has fluctuated over the past five years. In 2023, the cash ratio increased to 1.15 from 0.93 in 2022, indicating an improved liquidity position. However, it is important to note that the ratio was higher in 2020 at 1.29. This suggests that the company may have had a higher ability to cover its short-term liabilities with cash in 2020 compared to 2023. Overall, the company's cash ratio has shown variability, and further analysis of its cash management and working capital management may be necessary to fully evaluate its liquidity position.