GMS Inc (GMS)
Cash ratio
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 166,148 | 164,745 | 101,916 | 167,012 | 210,909 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 757,050 | 706,281 | 689,198 | 562,501 | 475,059 |
| Cash ratio | 0.22 | 0.23 | 0.15 | 0.30 | 0.44 |
April 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($166,148K
+ $—K)
÷ $757,050K
= 0.22
The cash ratio, which measures a company's ability to cover its short-term liabilities with cash and cash equivalents, for GMS Inc has shown a declining trend over the past five years. In April 2020, the cash ratio was at its highest point of 0.44, indicating that the company had a strong ability to cover its short-term liabilities with cash on hand. However, there has been a consistent decrease in the cash ratio since then, reaching its lowest point of 0.15 in April 2022. This suggests that GMS Inc may have faced challenges in maintaining sufficient cash reserves relative to its short-term obligations during this period.
While the cash ratio slightly improved in April 2023 to 0.23, indicating a better ability to cover short-term liabilities with available cash, it dropped again to 0.22 in April 2024. This downward trend raises concerns about GMS Inc's liquidity position and its ability to meet immediate financial obligations from cash resources alone.
Overall, the decreasing trend in the cash ratio for GMS Inc over the past five years highlights potential liquidity risks that the company may need to address to ensure financial stability and meet its short-term commitments effectively.
Peer comparison
Apr 30, 2024