WW Grainger Inc (GWW)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,036,000 | 660,000 | 325,000 | 241,000 | 585,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 2,305,000 | 1,831,000 | 2,010,000 | 1,528,000 | 1,441,000 |
| Cash ratio | 0.45 | 0.36 | 0.16 | 0.16 | 0.41 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,036,000K
+ $—K)
÷ $2,305,000K
= 0.45
Based on the data provided, the cash ratio for WW Grainger Inc has fluctuated over the past five years. The cash ratio represents the proportion of cash and cash equivalents a company holds relative to its current liabilities.
In December 31, 2020, the cash ratio was 0.41, indicating that the company had $0.41 in cash and cash equivalents for every dollar of current liabilities. This suggests a relatively strong position in terms of liquidity.
However, in both December 31, 2021 and December 31, 2022, the cash ratio decreased to 0.16, signaling a significant decline in the proportion of cash reserves compared to current liabilities. This could potentially raise concerns about the company's ability to meet its short-term obligations using its available cash resources.
By December 31, 2023, the cash ratio improved to 0.36, showing a recovery in liquidity compared to the previous two years. This improvement suggests that the company may have increased its cash holdings or reduced its current liabilities during this period.
Furthermore, as of December 31, 2024, the cash ratio further improved to 0.45, indicating a strong liquidity position where the company holds $0.45 in cash and cash equivalents for every dollar of current liabilities.
Overall, fluctuations in the cash ratio over the five-year period highlight the importance of monitoring a company's liquidity position and its ability to meet short-term obligations. It is essential for investors and stakeholders to assess changes in the cash ratio to understand the company's financial health and risk exposure.