Deluxe Corporation (DLX)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 34,399 | 71,962 | 40,400 | 41,200 | 123,100 |
| Short-term investments | US$ in thousands | — | — | 8,126 | 13,307 | 28,462 |
| Total current liabilities | US$ in thousands | 625,516 | 819,065 | 752,300 | 683,400 | 411,800 |
| Cash ratio | 0.05 | 0.09 | 0.06 | 0.08 | 0.37 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($34,399K
+ $—K)
÷ $625,516K
= 0.05
Based on the data provided for Deluxe Corporation's cash ratio over the years, there has been a noticeable decrease in the ratio from 0.37 on December 31, 2020, to 0.05 on December 31, 2024. The cash ratio represents the proportion of a company's current assets held in cash to its current liabilities, indicating its ability to cover short-term obligations.
The decreasing trend in Deluxe Corporation's cash ratio suggests a potential weakening liquidity position as the ratio has consistently declined over the years. A lower cash ratio may indicate that the company has less cash available to cover its immediate liabilities, which could potentially lead to challenges in meeting short-term financial obligations.
It is essential for Deluxe Corporation to closely monitor its cash position and manage its liquidity effectively to ensure that it can readily meet its short-term financial commitments. Further analysis of the company's cash flow management practices and working capital policies may be necessary to address the declining trend in the cash ratio and improve its overall financial health.