Helen of Troy Ltd (HELE)
Cash ratio
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 18,501 | 29,073 | 33,381 | 45,120 | 24,467 |
| Short-term investments | US$ in thousands | — | 3,941 | — | — | — |
| Total current liabilities | US$ in thousands | 450,811 | 412,158 | 602,690 | 614,892 | 338,896 |
| Cash ratio | 0.04 | 0.08 | 0.06 | 0.07 | 0.07 |
February 29, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($18,501K
+ $—K)
÷ $450,811K
= 0.04
The cash ratio of Helen of Troy Ltd has varied over the past five years, ranging from 0.04 to 0.08. The cash ratio measures the company's ability to cover its short-term liabilities using only its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on other current assets or external financing.
The decrease in the cash ratio from 0.08 in 2023 to 0.04 in 2024 may be a cause for concern as it suggests a decline in the company's liquidity and ability to meet short-term obligations. This trend should be further investigated to understand the reasons behind the reduction in the company's cash holdings relative to its current liabilities.
On the other hand, the relatively stable cash ratio between 0.06 and 0.07 from 2020 to 2022 indicates that the company has maintained a consistent level of liquidity over these years. This suggests that Helen of Troy has effectively managed its cash resources to support its operational and financial position.
Overall, the cash ratio provides valuable insights into Helen of Troy Ltd's liquidity position and ability to meet short-term obligations. Monitoring changes in the cash ratio over time can help assess the company's financial health and management of its cash resources.