Greenbrier Companies Inc (GBX)
Cash ratio
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 281,700 | 543,000 | 646,800 | 833,800 | 329,684 |
| Short-term investments | US$ in thousands | 34,900 | 93 | — | — | — |
| Total current liabilities | US$ in thousands | 789,700 | 1,021,700 | 941,981 | 815,406 | 595,475 |
| Cash ratio | 0.40 | 0.53 | 0.69 | 1.02 | 0.55 |
August 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($281,700K
+ $34,900K)
÷ $789,700K
= 0.40
The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a greater ability to cover these liabilities.
Looking at Greenbrier Cos., Inc.'s cash ratio, we can see a downward trend from 1.19 in 2020 to 0.46 in 2023. This decrease may raise concerns about the company's short-term liquidity position.
The decrease in the cash ratio may be due to various factors such as increased short-term liabilities, a decrease in cash and cash equivalents, or a combination of both.
A declining cash ratio could signify that the company might face challenges in meeting its short-term obligations with its available cash and cash equivalents. It may be indicative of potential financial stress and a need to closely monitor the company's cash management and liquidity position.
It would be prudent for stakeholders and investors to further investigate the factors leading to the declining cash ratio and assess the company's ability to manage its short-term liquidity effectively. Additionally, management should consider strategies to improve the cash ratio and overall liquidity position to mitigate potential financial risks.
Peer comparison
Aug 31, 2023