International Business Machines (IBM)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 13,947,000 | 13,068,000 | 7,886,000 | 6,650,000 | 13,188,000 |
| Short-term investments | US$ in thousands | 644,000 | 373,000 | 852,000 | 600,000 | 600,000 |
| Total current liabilities | US$ in thousands | 33,142,000 | 34,122,000 | 31,505,000 | 33,619,000 | 39,869,000 |
| Cash ratio | 0.44 | 0.39 | 0.28 | 0.22 | 0.35 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($13,947,000K
+ $644,000K)
÷ $33,142,000K
= 0.44
The cash ratio of International Business Machines (IBM) provides insight into the company's ability to meet its short-term financial obligations using its readily available cash and cash equivalents. The trend analysis of IBM's cash ratio from December 31, 2020, to December 31, 2024, shows fluctuations in the ratio over the years:
- As of December 31, 2020, the cash ratio stood at 0.35, indicating that IBM had $0.35 in cash and equivalents for every $1 of current liabilities. This suggests that IBM had a strong liquidity position at the end of 2020.
- However, by December 31, 2021, the cash ratio had decreased to 0.22, signaling a decline in IBM's ability to cover its short-term obligations solely with cash and equivalents. This could raise concerns about the company's liquidity position at the end of 2021.
- The cash ratio improved slightly to 0.28 by December 31, 2022, showing a partial recovery in IBM's liquidity position. While still below the 2020 level, the increase indicates an enhanced ability to meet short-term obligations with available cash.
- By December 31, 2023, the cash ratio further improved to 0.39, reflecting a significant strengthening of IBM's liquidity position. The higher ratio suggests that IBM had a more comfortable cushion of cash and equivalents relative to its current liabilities at the end of 2023.
- Finally, as of December 31, 2024, the cash ratio increased to 0.44, reaching the highest level in the analyzed period. This rise demonstrates a continued improvement in IBM's ability to cover short-term obligations with its readily available cash resources.
In conclusion, the trend analysis of IBM's cash ratio indicates fluctuations but an overall improvement in the company's liquidity position from 2020 to 2024. It is essential for investors and stakeholders to monitor these changes to assess IBM's ability to manage its short-term financial obligations effectively.
Peer comparison
Dec 31, 2024