Dorman Products Inc (DORM)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total current assets	US$ in thousands	1,233,710	1,269,120	1,076,580	922,931	754,590
Total current liabilities	US$ in thousands	547,151	678,295	665,048	322,645	220,502
Current ratio		2.25	1.87	1.62	2.86	3.42

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $1,233,710K ÷ $547,151K
= 2.25

Over the past five years, Dorman Products Inc's current ratio has fluctuated significantly. The current ratio measures the company's ability to cover its short-term liabilities with its current assets. A higher current ratio indicates a stronger liquidity position.

In 2019, the company had a high current ratio of 3.42, which suggests that Dorman had a comfortable buffer to meet its short-term obligations. However, this ratio decreased to 2.86 in 2020, indicating a slight decline in liquidity but still reflecting a relatively healthy position.

In 2021, the current ratio decreased further to 1.62, indicating a potential liquidity concern as the company may have had difficulty meeting its short-term obligations with its current assets. However, in 2022, there was an improvement as the current ratio rose to 1.87, although it remained below the levels seen in earlier years.

The most recent data for 2023 shows a current ratio of 2.25, reflecting an improvement in liquidity compared to the previous year. While the current ratio has increased from the previous year, it is important to note that it remains below the levels seen in 2019 and 2020.

Overall, Dorman Products Inc's current ratio has shown fluctuations over the years, indicating varying levels of liquidity. It is important for the company to maintain a balance between current assets and current liabilities to ensure it can meet its short-term obligations effectively.