Graco Inc (GGG)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 537,951 | 339,196 | 624,302 | 378,909 | 220,973 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 395,200 | 399,917 | 506,792 | 321,389 | 285,322 |
| Cash ratio | 1.36 | 0.85 | 1.23 | 1.18 | 0.77 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($537,951K
+ $—K)
÷ $395,200K
= 1.36
The cash ratio of Graco Inc has fluctuated over the past five years, ranging from 0.77 to 1.36. The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents.
In 2019, the cash ratio was 0.77, indicating that the company had less available cash to cover its current liabilities. However, this improved in the following years, with the ratio increasing to 1.18 in 2020, 1.23 in 2021, and further to 0.85 in 2022.
The significant improvement came in 2023 when the cash ratio surged to 1.36, indicating that Graco Inc had more than enough cash on hand to cover its short-term obligations. A higher cash ratio is generally seen as a positive indicator of a company's liquidity and ability to meet its financial obligations in the short term.
Overall, the upward trend in the cash ratio over the past five years suggests that Graco Inc has been managing its cash and cash equivalents effectively, increasing its liquidity position and financial stability.
Peer comparison
Dec 31, 2023