Kennametal Inc (KMT)
Cash ratio
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 127,971 | 106,021 | 85,586 | 154,047 | 606,684 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 415,961 | 433,975 | 485,649 | 437,394 | 898,080 |
| Cash ratio | 0.31 | 0.24 | 0.18 | 0.35 | 0.68 |
June 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($127,971K
+ $—K)
÷ $415,961K
= 0.31
The cash ratio of Kennametal Inc has fluctuated over the past five years, ranging from 0.18 in 2022 to 0.68 in 2020. The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher ratio indicates a stronger ability to cover short-term obligations.
In 2020, Kennametal Inc had a relatively high cash ratio of 0.68, suggesting a strong liquidity position. However, this ratio decreased significantly in 2022 to 0.18, indicating a potential liquidity strain.
The cash ratio improved in 2023 and 2024 to 0.24 and 0.31, respectively, but it remains below the level seen in 2020. This upward trend suggests a better ability to cover short-term obligations compared to 2022, but it still indicates room for improvement in liquidity management.
Overall, Kennametal Inc's cash ratio has shown variability in recent years, and it is important for the company to maintain a balance between liquidity and operational needs to ensure financial stability and meet its short-term obligations effectively.