KAR Auction Services Inc (KAR)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	93,500	225,700	177,600	752,100	507,600
Short-term investments	US$ in thousands	0	300	7,500	—	—
Total current liabilities	US$ in thousands	2,478,800	2,643,200	3,009,300	2,250,600	2,517,700
Cash ratio		0.04	0.09	0.06	0.33	0.20

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($93,500K + $0K) ÷ $2,478,800K
= 0.04

The cash ratio of Openlane Inc. has shown fluctuations over the past five years. In 2023, the cash ratio decreased to 0.08 from 0.12 in 2022, indicating a lower ability to cover its current liabilities with its available cash and cash equivalents. This may suggest a potential liquidity challenge for the company in the most recent year.

Comparing the current cash ratio to previous years, we observe a significant decline from 2020 when the ratio was 0.38, representing a substantial decrease in the company's ability to meet its short-term obligations solely through its cash reserves. The cash ratio in 2021 and 2019 was 0.10 and 0.25, respectively, indicating fluctuations in the company's liquidity position over the years.

Overall, the trend in the cash ratio for Openlane Inc. reflects varying levels of liquidity and highlights the importance of closely monitoring the company's cash position to ensure the ability to meet current obligations. A declining cash ratio may indicate a need for improved cash management strategies to enhance liquidity and financial stability.