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.
Peer comparison
Dec 31, 2023