Leggett & Platt Incorporated (LEG)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 365,500 | 316,500 | 361,700 | 348,900 | 247,600 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 1,262,600 | 968,100 | 1,335,700 | 1,006,000 | 928,100 |
| Cash ratio | 0.29 | 0.33 | 0.27 | 0.35 | 0.27 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($365,500K
+ $—K)
÷ $1,262,600K
= 0.29
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 liquidity position, as it shows the company has more cash on hand relative to its current liabilities.
Looking at Leggett & Platt, Inc.'s cash ratio over the past five years, we observe fluctuations in the ratio. In 2023, the cash ratio decreased to 0.34 from the previous year's 0.39, indicating a slight decline in the company's ability to cover its short-term liabilities with cash. However, it is important to note that the cash ratio of 0.34 is still relatively healthy.
Comparing the 2023 ratio to the ratios of the preceding years, we see that it is lower than the 2020 ratio of 0.40 but higher than the 2021 ratio of 0.31 and the 2019 ratio of 0.33. This suggests some variability in Leggett & Platt's liquidity position over the years.
Overall, while the 2023 cash ratio decreased slightly compared to the previous year, indicating a slightly weaker liquidity position, the ratio remains at a reasonable level, suggesting that Leggett & Platt, Inc. can cover its short-term liabilities with its available cash and cash equivalents, though the company should continue monitoring its liquidity position.
Peer comparison
Dec 31, 2023