DXC Technology Co (DXC)
Cash ratio
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,224,000 | 1,858,000 | 2,672,000 | 2,968,000 | 3,679,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 4,394,000 | 5,187,000 | 6,853,000 | 8,150,000 | 7,895,000 |
| Cash ratio | 0.28 | 0.36 | 0.39 | 0.36 | 0.47 |
March 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,224,000K
+ $—K)
÷ $4,394,000K
= 0.28
The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of funding.
For DXC Technology Co, the trend in the cash ratio over the past five years shows a declining pattern from 0.47 in 2020 to 0.28 in 2024. This decrease may raise concerns about the company's liquidity position in terms of its ability to cover short-term liabilities solely with available cash and cash equivalents.
While the cash ratio has decreased over the years, it is important to consider the industry benchmarks and compare DXC Technology Co's cash ratio with its peers to gain a better perspective on its liquidity position relative to industry standards.
In conclusion, the decreasing trend in DXC Technology Co's cash ratio indicates a potential weakening of its ability to cover short-term obligations with cash alone. Further analysis and monitoring of the company's liquidity position are recommended to assess its financial health accurately.
Peer comparison
Mar 31, 2024