Hilton Grand Vacations Inc (HGV)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 589,000 | 223,000 | 432,000 | 428,000 | 67,000 |
| Short-term investments | US$ in thousands | — | 72,000 | 2,000 | — | — |
| Total current liabilities | US$ in thousands | 1,151,000 | 1,197,000 | 112,000 | 16,000 | 599,000 |
| Cash ratio | 0.51 | 0.25 | 3.88 | 26.75 | 0.11 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($589,000K
+ $—K)
÷ $1,151,000K
= 0.51
The cash ratio of Hilton Grand Vacations Inc has fluctuated over the past five years, ranging from a low of 0.16 in 2019 to a high of 1.16 in 2020. The cash ratio measures the company's ability to cover its short-term liabilities with cash and cash equivalents.
In 2020, Hilton Grand Vacations Inc had a cash ratio of 1.16, indicating that the company had more than enough cash to cover its short-term obligations at that time. However, the ratio decreased significantly in 2021 to 0.55 and then further dropped to 0.19 in 2022, suggesting a potential liquidity strain in those years.
The cash ratio improved in 2023 to 0.52, but it is still lower than the ideal value of 1. A low cash ratio may indicate that the company may struggle to cover its short-term liabilities with its current cash reserves. It is essential for Hilton Grand Vacations Inc to monitor its liquidity position closely and ensure that it maintains an adequate level of cash to meet its short-term obligations.