Embecta Corp (EMBC)
Cash ratio
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 267,500 | 275,100 | 299,800 | 298,700 | 326,300 | 317,400 | 346,400 | 385,200 | 330,900 | 292,300 | 264,300 | 0 |
| Short-term investments | US$ in thousands | — | — | — | — | 200 | — | — | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 374,000 | 370,700 | 310,400 | 326,600 | 353,500 | 385,800 | 357,700 | 370,300 | 301,000 | 228,500 | 168,900 | 159,100 |
| Cash ratio | 0.72 | 0.74 | 0.97 | 0.91 | 0.92 | 0.82 | 0.97 | 1.04 | 1.10 | 1.28 | 1.56 | 0.00 |
September 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($267,500K
+ $—K)
÷ $374,000K
= 0.72
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 stronger ability to meet these obligations without relying on external financing.
Embecta Corp's cash ratio has fluctuated over the past several quarters, ranging from 0.00 to 1.56. The trend shows some volatility, with the ratio peaking at 1.56 in the first quarter of 2022 before declining in subsequent periods.
In general, a cash ratio above 1.0 indicates that a company can cover its short-term liabilities with its cash on hand. Embecta Corp's cash ratio has exceeded 1.0 in most periods, suggesting a relatively healthy liquidity position during those quarters.
However, the ratio dropped to 0.72 in the most recent period ending September 30, 2024, indicating a decrease in the company's ability to cover short-term obligations with its available cash. This may warrant further investigation into the company's cash management practices and overall liquidity position.
Overall, while Embecta Corp has demonstrated a solid ability to meet short-term obligations with its cash reserves in the past, the recent decline in the cash ratio highlights a potential liquidity concern that should be monitored closely in future periods.
Peer comparison
Sep 30, 2024