Innospec Inc (IOSP)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 203,700 | 147,100 | 141,800 | 105,300 | 75,700 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 371,500 | 405,800 | 336,600 | 252,400 | 303,500 |
| Cash ratio | 0.55 | 0.36 | 0.42 | 0.42 | 0.25 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($203,700K
+ $—K)
÷ $371,500K
= 0.55
The cash ratio of Innospec Inc has shown fluctuations over the past five years, ranging from 0.31 in 2019 to 0.61 in 2023. This ratio measures the company's ability to cover its short-term liabilities with its readily available cash and cash equivalents.
The cash ratio was at its lowest in 2019 at 0.31, indicating that the company had a lower level of cash and cash equivalents relative to its current liabilities. However, there has been an improvement in the cash ratio over the subsequent years, with the ratio increasing to 0.61 in 2023.
A cash ratio above 1.0 is considered healthy, as it suggests that the company has more than enough cash to cover its short-term obligations. Innospec's cash ratio has generally been below 1.0 over the years, indicating that the company may need to rely on other sources of liquidity, such as short-term investments or operating cash flows, to meet its short-term liabilities.
Overall, the fluctuations in Innospec's cash ratio highlight the importance of monitoring the company's liquidity position and its ability to meet short-term obligations using its available cash resources.
Peer comparison
Dec 31, 2023