Innospec Inc (IOSP)

Cash ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash and cash equivalents US$ in thousands 289,200 203,700 147,100 141,800 105,300
Short-term investments US$ in thousands — — — — —
Total current liabilities US$ in thousands 371,400 371,500 405,800 336,600 252,400
Cash ratio 0.78 0.55 0.36 0.42 0.42

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($289,200K + $—K) ÷ $371,400K
= 0.78

The cash ratio for Innospec Inc has shown variability over the past five years. As of December 31, 2020, the company had a cash ratio of 0.42, indicating that for every dollar of current liabilities, it had $0.42 in cash or cash equivalents. This ratio remained stable at 0.42 in December 31, 2021.

However, there was a slight decrease in the cash ratio to 0.36 as of December 31, 2022, suggesting a potential liquidity challenge as the company may have had fewer liquid assets relative to its current liabilities.

The cash ratio improved significantly to 0.55 by December 31, 2023, indicating an increase in the company's ability to meet its short-term obligations with cash on hand.

By December 31, 2024, the cash ratio further increased to 0.78, reflecting a healthier liquidity position for Innospec Inc compared to the previous years.

Overall, while the cash ratio fluctuated over the period under review, the increasing trend from 2022 to 2024 suggests an improvement in the company's liquidity management and ability to cover its short-term liabilities with cash reserves.