G-III Apparel Group Ltd (GIII)

Cash ratio

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Cash and cash equivalents	US$ in thousands	507,829	191,652	465,984	351,934	197,372
Short-term investments	US$ in thousands	—	—	—	63,523	—
Total current liabilities	US$ in thousands	493,628	579,069	510,805	402,002	613,960
Cash ratio		1.03	0.33	0.91	1.03	0.32

January 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($507,829K + $—K) ÷ $493,628K
= 1.03

The cash ratio of G-III Apparel Group Ltd has fluctuated over the past five years, ranging from a low of 0.32 in January 2020 to a high of 1.03 in both January 2024 and January 2021. The cash ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to cover immediate financial obligations with its readily available cash resources.

In January 2024, the cash ratio of 1.03 suggests that the company had $1.03 in cash and cash equivalents for every $1 of short-term liabilities, indicating a healthy liquidity position. This improvement from the previous year's cash ratio of 0.33 in January 2023 demonstrates the company's enhanced ability to meet its short-term obligations with its current cash holdings.

On the other hand, the cash ratio of 0.32 in January 2020 was relatively low, indicating a potential liquidity risk as the company had only $0.32 in cash and cash equivalents for every $1 of short-term liabilities.

Overall, a higher cash ratio is generally preferred as it signals a stronger liquidity position and ability to withstand short-term financial challenges. However, it is important to assess the cash ratio in conjunction with other liquidity and financial ratios to obtain a comprehensive understanding of the company's overall financial health and liquidity management.