International Paper (IP)
Cash ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 950,000 | 1,149,000 | 746,000 | 636,000 | 804,000 | 511,000 | 826,000 | 1,031,000 | 1,295,000 | 2,122,000 | 706,000 | 491,000 | 595,000 | 678,000 | 847,000 | 1,239,000 | 511,000 | 697,000 | 787,000 | 641,000 |
| Short-term investments | US$ in thousands | 163,000 | -2,308,000 | -2,303,000 | — | 804,000 | 511,000 | 151,000 | 291,000 | 245,000 | 2,122,000 | 4,850,000 | 296,000 | 4,850,000 | 4,850,000 | — | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 3,959,000 | 3,882,000 | 4,067,000 | 4,266,000 | 5,000,000 | 4,805,000 | 4,352,000 | 4,142,000 | 4,144,000 | 4,698,000 | 8,635,000 | 8,390,000 | 8,284,000 | 8,476,000 | 8,330,000 | 9,342,000 | 8,646,000 | 4,729,000 | 5,049,000 | 4,953,000 |
| Cash ratio | 0.28 | -0.30 | -0.38 | 0.15 | 0.32 | 0.21 | 0.22 | 0.32 | 0.37 | 0.90 | 0.64 | 0.09 | 0.66 | 0.65 | 0.10 | 0.13 | 0.06 | 0.15 | 0.16 | 0.13 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($950,000K
+ $163,000K)
÷ $3,959,000K
= 0.28
The cash ratio of International Paper Co. over the past eight quarters has shown fluctuation. The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio indicates a stronger ability to cover short-term obligations.
In Q1 2022, the cash ratio was relatively high at 0.48, indicating a strong cash position compared to short-term liabilities. However, in subsequent quarters, the cash ratio decreased, reaching its lowest point of 0.25 in Q3 2022, before rebounding in Q4 2022 to 0.28.
The trend continued in 2023, with fluctuations in the cash ratio. The cash ratio was 0.31 in Q1 2023, followed by a decrease to 0.34 in Q2 2023, and further to 0.46 in Q3 2023. The trend reversed in Q4 2023, with a decrease to 0.42.
Overall, the decreasing trend in the cash ratio from Q1 2022 to Q3 2022 may suggest a temporary strain on International Paper Co.'s liquidity position. The subsequent recovery in Q4 2022 and fluctuating ratios in 2023 indicate a varying ability to cover short-term obligations with available cash.
Further analysis of the company's cash management practices, investment strategies, and overall financial health would be necessary to fully assess the implications of these fluctuations in the cash ratio.
Peer comparison
Dec 31, 2023