Federal Signal Corporation (FSS)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 91,100 | 61,000 | 47,500 | 40,500 | 81,700 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 241,800 | 195,800 | 180,500 | 170,400 | 148,400 |
| Cash ratio | 0.38 | 0.31 | 0.26 | 0.24 | 0.55 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($91,100K
+ $—K)
÷ $241,800K
= 0.38
The cash ratio of Federal Signal Corporation has exhibited a fluctuating trend over the years from 2020 to 2024. Starting at 0.55 in December 2020, the ratio declined to 0.24 by December 2021, indicating a significant decrease in the company's ability to cover its short-term liabilities using only cash and cash equivalents.
However, there has been a gradual improvement in the cash ratio in the subsequent years, with the ratio increasing to 0.26 by December 2022, 0.31 by December 2023, and further to 0.38 by December 2024. These increments suggest a positive development in Federal Signal Corporation's liquidity position and its capacity to meet its short-term obligations with cash on hand.
It is crucial for investors and stakeholders to closely monitor the cash ratio to assess the company's liquidity risk and its ability to navigate potential financial challenges effectively. Overall, the increasing trend in the cash ratio from 2021 to 2024 indicates an enhancement in Federal Signal Corporation's liquidity position over the years.
Peer comparison
Dec 31, 2024