Eastman Chemical Company (EMN)

Cash ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash and cash equivalents US$ in thousands 837,000 548,000 493,000 459,000 564,000
Short-term investments US$ in thousands 1,000 1,000 26,000 1,000
Total current liabilities US$ in thousands 2,708,000 2,576,000 3,251,000 2,971,000 2,038,000
Cash ratio 0.31 0.21 0.15 0.16 0.28

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($837,000K + $—K) ÷ $2,708,000K
= 0.31

Based on the data provided for Eastman Chemical Company's cash ratio over the past five years, we observe the following trends:

1. In December 31, 2020, the cash ratio was 0.28, indicating that the company had 0.28 units of cash and cash equivalents for every dollar of current liabilities.

2. The cash ratio decreased to 0.16 by December 31, 2021, suggesting a decrease in the company's ability to cover its short-term obligations with its readily available cash resources.

3. By December 31, 2022, the cash ratio further declined to 0.15, indicating a continued decrease in the company's liquidity position.

4. In December 31, 2023, there was a slight improvement in the cash ratio to 0.21, possibly indicating better management of cash resources or a reduction in current liabilities.

5. The most recent data for December 31, 2024, shows a significant improvement in the cash ratio to 0.31, suggesting a healthier liquidity position for the company compared to the previous years.

Overall, the fluctuation in Eastman Chemical Company's cash ratio over the five-year period indicates varying levels of liquidity and the company's ability to meet its short-term obligations with its cash reserves. It is essential for investors and stakeholders to monitor these changes to assess the company's financial health and liquidity management.