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

Company name
Symbol
Cash ratio
Encompass Health Corp
EHC
0.16
Mednax Inc
MD
0.46
Select Medical Holdings
SEM
0.11