Insteel Industries Inc (IIIN)

Cash ratio

Sep 30, 2024 Sep 30, 2023 Sep 30, 2022 Sep 30, 2021 Sep 30, 2020
Cash and cash equivalents US$ in thousands 111,538 125,670 48,316 89,884 68,688
Short-term investments US$ in thousands -6,177
Total current liabilities US$ in thousands 47,034 46,155 62,596 68,849 53,678
Cash ratio 2.24 2.72 0.77 1.31 1.28

September 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($111,538K + $-6,177K) ÷ $47,034K
= 2.24

The cash ratio of Insteel Industries Inc has shown fluctuating trends over the past five years. In 2024, the cash ratio decreased to 2.24 from 2.72 in 2023, indicating a lower level of cash availability in relation to current liabilities. Although it dropped from the previous year, the current cash ratio still appears relatively healthy. Comparing this to the significant increase in the cash ratio in 2023 from 0.77 in 2022 reflects a sharp improvement in liquidity management or cash position.

The cash ratio of 2.24 in 2024 suggests that the company had $2.24 in cash and cash equivalents for every $1 of current liabilities, indicating a strong ability to cover short-term obligations with available cash on hand. This level of cash can provide a cushion against unforeseen expenses or economic downturns, enhancing financial stability.

Looking back further, the cash ratio in 2022 was notably lower at 0.77, signaling potential liquidity challenges or a relatively lower cash position compared to short-term obligations. The substantial increase in the cash ratio to 1.31 in 2021 and further to 1.28 in 2020 demonstrates an effort to strengthen liquidity or more conservative cash management practices in those years.

In conclusion, Insteel Industries Inc has demonstrated varying levels of liquidity over the years, with notable improvements in some periods and slight declines in others. Monitoring and managing cash levels effectively are crucial for the company to meet its short-term obligations and maintain financial resilience.


Peer comparison

Sep 30, 2024