Chart Industries Inc (GTLS)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 308,600 | 201,100 | 663,600 | 122,200 | 125,100 |
| Short-term investments | US$ in thousands | — | — | — | — | 78,000 |
| Total current liabilities | US$ in thousands | 1,789,800 | 1,866,200 | 1,081,600 | 693,900 | 634,800 |
| Cash ratio | 0.17 | 0.11 | 0.61 | 0.18 | 0.32 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($308,600K
+ $—K)
÷ $1,789,800K
= 0.17
The cash ratio indicates the proportion of a company's current assets that are held in cash or cash equivalents, providing insight into its ability to cover short-term liabilities. Analyzing the trend in Chart Industries Inc's cash ratio from 2020 to 2024, we observe fluctuations in the ratio.
In 2020, the cash ratio stood at 0.32, suggesting that the company had $0.32 in cash for every $1 of current liabilities, indicating a relatively healthy liquidity position. However, by the end of 2021, the cash ratio declined to 0.18, indicating a decrease in the company's ability to cover its short-term obligations with cash on hand.
Subsequently, there was a significant improvement in the cash ratio in 2022, reaching 0.61, indicating a stronger liquidity position compared to the previous year. This surge in the cash ratio suggests that Chart Industries Inc significantly increased its cash reserves relative to its current liabilities.
However, the trend reversed in 2023, with the cash ratio dropping to 0.11, signifying a notable decline in the company's ability to cover its short-term liabilities with cash alone. This decrease may raise concerns about the company's liquidity position and its ability to meet immediate financial obligations.
By the end of 2024, the cash ratio slightly improved to 0.17, indicating a moderated increase in the company's liquidity compared to the previous year but remaining below the levels observed in 2022.
Overall, the fluctuations in Chart Industries Inc's cash ratio reflect varying levels of liquidity over the period, highlighting the importance of monitoring cash reserves and managing short-term obligations effectively.