Enhabit Inc. (EHAB)

Cash ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022
Cash and cash equivalents	US$ in thousands	27,400	31,600	34,400	37,600	22,900	44,100	50,200
Short-term investments	US$ in thousands	—	—	1,800	600	—	—	—
Total current liabilities	US$ in thousands	137,700	143,000	123,500	135,600	132,900	150,300	154,400
Cash ratio		0.20	0.22	0.29	0.28	0.17	0.29	0.33

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($27,400K + $—K) ÷ $137,700K
= 0.20

The cash ratio measures a company's ability to cover its short-term liabilities with its readily available cash and cash equivalents. A higher cash ratio indicates a stronger liquidity position, as the company has more cash on hand relative to its current liabilities.

Analyzing Enhabit Inc.'s cash ratio over the past few quarters, we observe fluctuations in its liquidity position. The cash ratio ranged from 0.17 to 0.33, indicating some variability in the company's ability to meet its short-term obligations using its cash reserves alone.

Specifically, in the latest quarter, the cash ratio was 0.20, which suggests that Enhabit Inc. had $0.20 in cash and cash equivalents for every $1 of current liabilities. This ratio has decreased from the previous quarter, indicating a potential tightening of the company's liquidity position.

It is important to further investigate the reasons behind these fluctuations in the cash ratio to assess the effectiveness of Enhabit Inc.'s cash management strategies and its ability to maintain sufficient liquidity for operational needs and financial obligations.