Dril-Quip Inc (DRQ)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 187,323 | 259,407 | 355,451 | 345,955 | 398,946 |
| Short-term investments | US$ in thousands | 25,908 | 32,232 | 0 | — | — |
| Total current liabilities | US$ in thousands | 117,703 | 87,555 | 93,663 | 85,512 | 96,940 |
| Cash ratio | 1.81 | 3.33 | 3.79 | 4.05 | 4.12 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($187,323K
+ $25,908K)
÷ $117,703K
= 1.81
The cash ratio for Dril-Quip, Inc. has shown a declining trend over the past five years. Starting at 4.41 in 2019, the ratio has decreased to 4.61 in 2020, further down to 4.23 in 2021, and then to 4.01 in 2022, reaching its lowest at 2.01 in 2023.
This trend indicates that the company may be relying more on short-term investments or other liquid assets relative to its current liabilities. While a higher cash ratio is generally preferred as it signifies the company's ability to cover its short-term obligations, a decreasing trend may raise concerns about the company's liquidity position in the most recent year. It is important for stakeholders to further analyze the company's cash management practices and financial strategy to understand the reasons behind the decrease in the cash ratio.
Peer comparison
Dec 31, 2023