Now Inc (DNOW)

Cash ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash and cash equivalents US$ in thousands 256,000 299,000 212,000 313,000 387,000
Short-term investments US$ in thousands — — — — —
Total current liabilities US$ in thousands 442,000 418,000 439,000 369,000 272,000
Cash ratio 0.58 0.72 0.48 0.85 1.42

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($256,000K + $—K) ÷ $442,000K
= 0.58

The cash ratio of Now Inc has shown a fluctuating trend over the past five years. Starting at 1.42 on December 31, 2020, the ratio decreased to 0.85 by the end of 2021, indicating a lower ability to cover its short-term liabilities solely with cash and cash equivalents. This downward trend continued into 2022, with the cash ratio dropping further to 0.48.

However, there was a slight improvement in 2023, as the cash ratio increased to 0.72. This uptick suggests a better liquidity position compared to the previous year. Nonetheless, by the end of 2024, the cash ratio fell again to 0.58, signaling a decrease in the ability to meet short-term obligations solely with cash.

Overall, the trend in Now Inc's cash ratio highlights some fluctuations in its liquidity position over the years. It is essential for the company to closely monitor and manage its cash levels to ensure it can meet its short-term obligations effectively.