Goodyear Tire & Rubber Co (GT)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 902,000 | 1,227,000 | 1,088,000 | 1,539,000 | 908,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 7,147,000 | 7,140,000 | 6,612,000 | 5,106,000 | 5,287,000 |
| Cash ratio | 0.13 | 0.17 | 0.16 | 0.30 | 0.17 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($902,000K
+ $—K)
÷ $7,147,000K
= 0.13
The cash ratio of Goodyear Tire & Rubber Co. has shown some fluctuations over the past five years. The cash ratio measures the company's ability to cover its short-term liabilities using its most liquid assets, cash and cash equivalents.
In 2023, the cash ratio was 0.17, indicating that the company had $0.17 in cash and cash equivalents for every dollar of current liabilities. This ratio decreased from the previous year, which could suggest a decrease in the company's ability to cover its short-term obligations with its available cash.
Comparing the cash ratio to 2021 and 2019, the company had higher cash ratios of 0.20 and 0.22, respectively. This implies that in those years, Goodyear had a higher level of liquidity relative to its short-term liabilities.
On the other hand, the cash ratio was notably higher at 0.35 in 2020. This suggests that the company had a significant increase in its liquidity position in that particular year, possibly due to a higher cash balance or a decrease in short-term liabilities.
Overall, fluctuations in the cash ratio over the past five years indicate changes in the company's liquidity position and its ability to meet short-term obligations with available cash resources. It is important for stakeholders to closely monitor this ratio to assess the company's financial health and ability to manage its short-term liquidity needs.