International Paper (IP)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,170,000 | 1,113,000 | 804,000 | 1,295,000 | 595,000 |
| Short-term investments | US$ in thousands | — | — | 804,000 | 245,000 | 4,850,000 |
| Total current liabilities | US$ in thousands | 4,258,000 | 3,959,000 | 5,000,000 | 4,144,000 | 8,284,000 |
| Cash ratio | 0.27 | 0.28 | 0.32 | 0.37 | 0.66 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,170,000K
+ $—K)
÷ $4,258,000K
= 0.27
The cash ratio of International Paper has shown a decreasing trend over the five-year period from December 31, 2020, to December 31, 2024. The ratio, which measures the company's ability to cover its short-term obligations with its cash and cash equivalents, has declined from 0.66 in 2020 to 0.27 in 2024.
This downward trend may indicate a potential liquidity concern, as the company's cash reserves have decreased relative to its short-term liabilities over the years. A lower cash ratio may suggest that International Paper has limited availability of liquid assets to meet its immediate financial obligations.
It is important for stakeholders to closely monitor International Paper's cash management strategies and liquidity position to ensure the company can effectively manage its short-term obligations and maintain financial stability. Further analysis of the company's cash flow and working capital management may be necessary to address any liquidity risks highlighted by the declining cash ratio.
Peer comparison
Dec 31, 2024