GE Aerospace (GE)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	12,685,000	15,736,000	14,446,000	15,100,000	36,119,000
Short-term investments	US$ in thousands	982,000	5,706,000	7,609,000	12,297,000	218,000
Total current liabilities	US$ in thousands	34,392,000	32,103,000	49,428,000	51,953,000	54,613,000
Cash ratio		0.40	0.67	0.45	0.53	0.67

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($12,685,000K + $982,000K) ÷ $34,392,000K
= 0.40

The cash ratio measures the ability of GE Aerospace to cover its short-term liabilities with its cash and cash equivalents. From the provided data, the cash ratio has fluctuated over the past five years.

In December 31, 2020, the cash ratio stood at 0.67, indicating that GE Aerospace had $0.67 in cash and cash equivalents for every $1 of short-term liabilities. This ratio decreased to 0.53 by December 31, 2021, suggesting a slight decrease in liquidity.

By December 31, 2022, the cash ratio further declined to 0.45, indicating a decrease in the company's ability to cover its short-term obligations with cash on hand. However, the ratio then improved in 2023 to 0.67, indicating a positive trend in liquidity.

Despite the improvement in 2023, the cash ratio decreased again to 0.40 by December 31, 2024, signaling a decrease in liquidity and potentially raising concerns about the company's ability to meet its short-term obligations with available cash.

Overall, the fluctuation in the cash ratio over the past five years suggests varying levels of liquidity risk for GE Aerospace, highlighting the importance of closely monitoring cash levels to ensure the company can meet its short-term financial obligations.