DXP Enterprises Inc (DXPE)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 173,120 | 46,026 | 48,989 | 119,328 | 54,203 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 224,165 | 212,901 | 181,062 | 147,139 | 139,325 |
| Cash ratio | 0.77 | 0.22 | 0.27 | 0.81 | 0.39 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($173,120K
+ $—K)
÷ $224,165K
= 0.77
The cash ratio of DXP Enterprises Inc has exhibited fluctuations over the past five years. The ratio indicates the firm's ability to cover its short-term liabilities with cash and cash equivalents. A higher cash ratio is generally considered favorable as it signifies a stronger liquidity position.
In the case of DXP Enterprises Inc, the cash ratio was at its highest in 2020 at 0.81, indicating a strong ability to cover short-term obligations with cash on hand. However, the ratio significantly declined in 2022 to 0.22, suggesting a potential liquidity strain.
By the end of 2023, the cash ratio improved to 0.77, indicating a better liquidity position compared to the previous year but still lower than the levels seen in 2020. This improvement signals a better ability to meet short-term obligations from available cash and cash equivalents.
Overall, while the recent increase in the cash ratio is a positive sign, management should continue to monitor and manage the company's liquidity position to ensure timely payment of debts and operational stability.
Peer comparison
Dec 31, 2023