FTI Consulting Inc (FCN)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 303,222 | 491,688 | 494,485 | 294,953 | 369,373 |
| Short-term investments | US$ in thousands | 25,461 | 0 | — | — | — |
| Total current liabilities | US$ in thousands | 892,769 | 769,491 | 718,116 | 670,171 | 612,537 |
| Cash ratio | 0.37 | 0.64 | 0.69 | 0.44 | 0.60 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($303,222K
+ $25,461K)
÷ $892,769K
= 0.37
The cash ratio of FTI Consulting Inc. has shown a fluctuating trend over the past five years. As of December 31, 2023, the cash ratio stands at 0.46, indicating that the company has $0.46 in cash and cash equivalents for every $1 of current liabilities. This represents a decrease from the previous year's level of 0.75.
While a higher cash ratio is generally preferred as it signifies a company's ability to cover its short-term obligations with cash on hand, a declining trend may raise concerns about liquidity management. The decrease in the cash ratio from 2022 to 2023 suggests a potential weakening of FTI Consulting Inc.'s ability to meet its short-term obligations solely with cash reserves.
It is essential for stakeholders to further assess the reasons behind this downward trend in the cash ratio and evaluate the company's overall liquidity position to ensure the sustainability of its operations and financial health.
Peer comparison
Dec 31, 2023