Keurig Dr Pepper Inc (KDP)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	267,000	535,000	567,000	240,000	75,000
Short-term investments	US$ in thousands	—	49,000	2,000	88,000	1,000
Total current liabilities	US$ in thousands	8,916,000	8,076,000	6,485,000	7,694,000	6,474,000
Cash ratio		0.03	0.07	0.09	0.04	0.01

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($267,000K + $—K) ÷ $8,916,000K
= 0.03

The cash ratio measures a company's ability to cover its short-term obligations with its cash and cash equivalents. Keurig Dr Pepper Inc's cash ratio has fluctuated over the past five years, ranging from 0.04 to 0.14.

In 2023, the cash ratio decreased to 0.08 from 0.10 in 2022, indicating a slight decline in the company's ability to meet its short-term liabilities solely with its cash reserves. However, Keurig Dr Pepper Inc still maintains a relatively adequate level of cash to cover its immediate financial obligations.

Compared to 2021 when the cash ratio was 0.14, the current ratio has decreased further, suggesting that the company may have deployed more of its cash towards investments, acquisitions, or other uses rather than holding it in cash.

In 2020, the cash ratio was at its lowest point at 0.06, highlighting potential liquidity concerns during that period. However, the company improved its cash position in the following years.

Overall, although the cash ratio has fluctuated, it is important for investors and stakeholders to monitor Keurig Dr Pepper Inc's ability to maintain a healthy level of cash reserves to meet its short-term obligations effectively.