KAR Auction Services Inc (KAR)

Cash ratio

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash and cash equivalents US$ in thousands 143,000 132,100 128,600 150,900 93,500 110,300 242,400 219,600 225,700 148,700 804,400 134,200 190,000 631,900 621,600 759,000 752,100 1,276,700 968,500 293,100
Short-term investments US$ in thousands — — — — — — — — — — — — — — — — — — — —
Total current liabilities US$ in thousands 2,565,500 2,585,300 2,576,100 2,573,700 2,478,800 2,508,700 2,646,200 2,666,400 2,643,200 2,820,400 3,547,900 4,565,600 2,975,800 2,756,700 2,683,300 2,656,000 2,250,600 2,354,500 2,009,300 2,018,800
Cash ratio 0.06 0.05 0.05 0.06 0.04 0.04 0.09 0.08 0.09 0.05 0.23 0.03 0.06 0.23 0.23 0.29 0.33 0.54 0.48 0.15

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 fluctuated over the past few years, showing some stability in the range of 0.03 to 0.54. The cash ratio represents the company's ability to cover its short-term obligations with its cash and cash equivalents. A higher cash ratio indicates a better ability to meet short-term liabilities.

The cash ratio was relatively low, ranging from 0.03 to 0.15, in the first half of 2020, indicating a lower level of cash and cash equivalents relative to current liabilities during that period. However, there was a significant increase in the cash ratio in the second half of 2020, reaching its peak of 0.54 in September 2020, suggesting an improvement in the company's liquidity position.

Subsequently, the cash ratio decreased steadily from December 2020 to June 2021, indicating a potential decrease in the company's cash reserves relative to its short-term obligations. The ratio remained relatively stable at around 0.23 throughout the rest of 2021 and the first half of 2022.

In the second half of 2022 and the first half of 2023, there was a decline in the cash ratio to 0.04, suggesting a potential liquidity challenge during that period. The ratio slightly improved in the second half of 2023 and throughout 2024, stabilizing around 0.05 to 0.06.

Overall, the cash ratio of KAR Auction Services Inc reflects fluctuations in its liquidity position over the years, highlighting the importance of monitoring the company's ability to meet its short-term obligations with available cash resources.