Flowserve Corporation (FLS)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 545,678 | 434,971 | 658,452 | 1,095,270 | 670,980 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 1,438,580 | 1,243,150 | 1,131,800 | 1,141,630 | 1,117,440 |
| Cash ratio | 0.38 | 0.35 | 0.58 | 0.96 | 0.60 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($545,678K
+ $—K)
÷ $1,438,580K
= 0.38
Flowserve Corp.'s cash ratio has fluctuated over the past five years, ranging from 0.63 to 1.30. This ratio measures the company's ability to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio indicates the company has more cash on hand relative to its current liabilities, signifying stronger liquidity and a better ability to meet its short-term obligations without relying on external sources of financing.
In 2023, Flowserve Corp.'s cash ratio was 0.65, showing a slight increase from the previous year. While the ratio indicates that the company has sufficient cash to cover 65% of its short-term liabilities, it may also suggest a relatively lower level of liquidity compared to earlier years. This could be due to various factors such as changes in operational efficiency, investment decisions, or the company's overall financial strategy.
It is essential for investors and financial analysts to monitor trends in the cash ratio over time to assess the company's liquidity position and financial health. A declining trend in the cash ratio may raise concerns about the company's ability to meet its short-term obligations, while a consistently high ratio could indicate underutilization of cash resources that could be deployed more effectively elsewhere in the business.
Peer comparison
Dec 31, 2023