Five Below Inc (FIVE)

Cash ratio

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Cash and cash equivalents	US$ in thousands	179,749	332,324	64,973	268,783	202,490
Short-term investments	US$ in thousands	280,339	66,845	277,141	140,928	59,229
Total current liabilities	US$ in thousands	715,926	602,560	586,901	435,670	351,345
Cash ratio		0.64	0.66	0.58	0.94	0.74

February 3, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($179,749K + $280,339K) ÷ $715,926K
= 0.64

The cash ratio of Five Below Inc has exhibited fluctuations over the past five years, ranging from 0.58 to 0.94. 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 that a company has a greater capacity to meet its short-term obligations using its readily available cash resources.

In the latest period, Five Below Inc's cash ratio stands at 0.64, indicating a slight decrease compared to the prior year. This suggests that the company may have a slightly lower ability to cover its short-term liabilities solely with its cash holdings. However, it is still above the levels observed in previous years, except for 2021 when the cash ratio was notably high at 0.94.

Overall, the trend in Five Below Inc's cash ratio indicates a fluctuating but generally adequate level of liquidity to meet short-term obligations. It is important for investors and stakeholders to monitor this ratio in conjunction with other financial metrics to assess the company's overall financial health and liquidity position.