KAR Auction Services Inc (KAR)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	143,000	93,500	225,700	190,000	752,100
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	2,565,500	2,478,800	2,643,200	2,975,800	2,250,600
Cash ratio		0.06	0.04	0.09	0.06	0.33

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($143,000K + $—K) ÷ $2,565,500K
= 0.06

The cash ratio of KAR Auction Services Inc has been fluctuating over the past five years. As of December 31, 2020, the cash ratio was 0.33, indicating that the company had $0.33 in cash and cash equivalents for every $1 of current liabilities. However, by December 31, 2021, the cash ratio had decreased to 0.06, suggesting a significant decline in the company's ability to meet its short-term obligations with its available cash.

In the subsequent years, the cash ratio improved slightly, reaching 0.09 by December 31, 2022. This uptick indicates a slight enhancement in the company's liquidity position compared to the previous year. However, by December 31, 2023, the cash ratio dropped again to 0.04, signaling a decrease in the company's ability to cover its short-term liabilities with its cash reserves.

By the end of the most recent year, December 31, 2024, the cash ratio remained at 0.06, the same level as in 2021. This indicates that the company's liquidity position has not significantly changed over the past four years.

Overall, based on the trend in the cash ratio, KAR Auction Services Inc experienced fluctuations in its liquidity position over the specified period, with some improvements but also periods of decline. It is important for the company to closely monitor its cash reserves and manage its short-term liabilities effectively to ensure its financial stability and ability to meet its obligations.