Ecolab Inc (ECL)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	1,256,800	919,500	598,600	359,900	1,260,200
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	4,792,800	4,345,800	4,210,400	3,553,200	2,932,200
Cash ratio		0.26	0.21	0.14	0.10	0.43

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,256,800K + $—K) ÷ $4,792,800K
= 0.26

The cash ratio of Ecolab Inc has fluctuated over the years as follows:
- December 31, 2020: 0.43
- December 31, 2021: 0.10
- December 31, 2022: 0.14
- December 31, 2023: 0.21
- December 31, 2024: 0.26

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 company's strong liquidity position, as it can easily meet its short-term obligations.

In the case of Ecolab Inc, the cash ratio decreased significantly from 0.43 in 2020 to 0.10 in 2021, signaling a potential liquidity concern. However, the ratio improved in the following years, reaching 0.26 by December 2024.

Overall, while the company experienced a liquidity challenge in 2021, it managed to enhance its liquidity position in the subsequent years, although it still maintained a relatively conservative cash position relative to its short-term liabilities.