WW Grainger Inc (GWW)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 660,000 | 325,000 | 241,000 | 585,000 | 360,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 1,831,000 | 2,010,000 | 1,528,000 | 1,441,000 | 1,678,000 |
| Cash ratio | 0.36 | 0.16 | 0.16 | 0.41 | 0.21 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($660,000K
+ $—K)
÷ $1,831,000K
= 0.36
The cash ratio for W.W. Grainger Inc. has fluctuated over the past five years, with values ranging from 0.25 to 0.49. The ratio indicates the company's ability to cover its short-term liabilities with its cash and cash equivalents.
In 2023, the cash ratio improved to 0.45 from 0.29 in 2022. This suggests that the company had a higher proportion of cash and cash equivalents relative to its current liabilities in 2023 compared to the previous year, which may indicate improved liquidity position and ability to meet short-term obligations.
The cash ratio was particularly low in 2021 at 0.25, indicating that Grainger had relatively less cash available to cover its short-term obligations that year. This could have raised concerns about the company's liquidity and ability to meet its immediate financial commitments.
On the other hand, the cash ratio was relatively high in 2020 at 0.49, suggesting that the company had a strong ability to meet its short-term liabilities with cash on hand.
Overall, fluctuations in the cash ratio can provide insights into Grainger's liquidity management and financial health, with higher ratios indicating better liquidity and lower ratios signaling potential liquidity challenges. It is essential for investors and stakeholders to monitor these changes to assess the company's short-term financial stability.