Lear Corporation (LEA)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	1,196,300	1,114,900	1,318,300	1,306,700	1,487,700
Short-term investments	US$ in thousands	4,800	3,600	3,500	9,300	17,100
Total current liabilities	US$ in thousands	5,667,200	5,188,300	4,759,900	5,076,700	4,666,200
Cash ratio		0.21	0.22	0.28	0.26	0.32

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,196,300K + $4,800K) ÷ $5,667,200K
= 0.21

The cash ratio of Lear Corp. has fluctuated over the past five years, ranging from 0.38 to 0.46. The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to cover short-term obligations using readily available cash.

In 2021, Lear Corp. had the highest cash ratio of 0.45, indicating an improved ability to pay off short-term obligations with its cash holdings. However, in 2023, the cash ratio decreased slightly to 0.39, suggesting a lower level of liquidity relative to its short-term liabilities.

Overall, Lear Corp.'s cash ratio trends show some variability but generally demonstrate a reasonable level of liquidity over the years, which is essential for meeting short-term financial obligations efficiently. It is important for investors and stakeholders to monitor fluctuations in the cash ratio to assess the company's liquidity position and financial health.