Encompass Health Corp (EHC)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 69,100 | 21,800 | 49,400 | 185,600 | 60,000 |
| Short-term investments | US$ in thousands | 37,600 | — | 5,400 | 38,400 | 34,800 |
| Total current liabilities | US$ in thousands | 656,400 | 575,900 | 748,800 | 717,300 | 721,000 |
| Cash ratio | 0.16 | 0.04 | 0.07 | 0.31 | 0.13 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($69,100K
+ $37,600K)
÷ $656,400K
= 0.16
The cash ratio of Encompass Health Corp has seen fluctuations over the past five years, ranging from 0.24 to 0.43. The cash ratio measures the 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.
In 2020, the cash ratio was relatively high at 0.43, suggesting that Encompass Health Corp had a comfortable cushion of cash to cover its short-term liabilities. However, this ratio dropped to 0.24 in 2021 and improved slightly to 0.26 in 2022, indicating a potential tightening of liquidity in those years.
In the most recent year, 2023, the cash ratio improved to 0.30, which could be a positive sign of increased liquidity and a better ability to meet short-term obligations. It is important for the company to maintain an optimal level of liquidity to ensure financial stability and weather unforeseen challenges.
Overall, Encompass Health Corp's cash ratio has shown variability in recent years, emphasizing the importance of monitoring liquidity levels and managing cash effectively to support the company's financial health.
Peer comparison
Dec 31, 2023