CarMax Inc (KMX)

Cash ratio

		Feb 28, 2025	Feb 29, 2024	Feb 28, 2023	Feb 28, 2022	Feb 28, 2021
Cash and cash equivalents	US$ in thousands	—	574,142	314,758	102,716	132,319
Short-term investments	US$ in thousands	—	17,130,000	—	—	—
Total current liabilities	US$ in thousands	—	2,312,290	1,938,310	2,047,460	1,698,550
Cash ratio		—	7.66	0.16	0.05	0.08

February 28, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($—K + $—K) ÷ $—K
= —

The cash ratio, which measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, for CarMax Inc shows a fluctuating trend over the past years as follows:

- As of February 28, 2021, the cash ratio was 0.08, indicating that CarMax had $0.08 of cash and cash equivalents for every $1 of current liabilities.
- By February 28, 2022, the cash ratio decreased to 0.05, suggesting a slight decrease in CarMax's ability to cover its short-term obligations with cash on hand.
- The cash ratio improved significantly by February 28, 2023, reaching 0.16, which could indicate a stronger liquidity position for CarMax at that time.
- A notable spike in the cash ratio occurred by February 29, 2024, where the ratio soared to 7.66. This exceptionally high ratio suggests CarMax had a substantial amount of cash compared to its short-term liabilities that year.
- Unfortunately, there is no data available for February 28, 2025, as denoted by "—". Further analysis for that year is not possible based on the provided information.

Overall, the cash ratio for CarMax Inc has shown fluctuations over the years, with notable improvements in liquidity in some years and a significant increase in cash relative to short-term liabilities in others. The trend demonstrates varying levels of liquidity and the company's ability to meet its short-term financial obligations with its available cash resources.