Leslies Inc (LESL)
Cash ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | ||
|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 55,420 | 112,293 | 343,498 |
| Short-term investments | US$ in thousands | — | — | — |
| Total current liabilities | US$ in thousands | 225,830 | 347,956 | 309,713 |
| Cash ratio | 0.25 | 0.32 | 1.11 |
September 30, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($55,420K
+ $—K)
÷ $225,830K
= 0.25
The cash ratio measures a company's ability to cover its short-term liabilities with its readily available cash and cash equivalents. A higher cash ratio indicates a company is more capable of meeting its short-term obligations without relying on external sources.
For Leslies Inc, the cash ratio declined from 1.11 in 2021 to 0.32 in 2022, and then further dropped to 0.25 in 2023. This downward trend suggests a decreasing ability to cover short-term liabilities with available cash over the years.
The significant decrease in the cash ratio may raise concerns about Leslies Inc's liquidity position. It implies that the company may be facing challenges in maintaining sufficient cash reserves to meet its immediate financial obligations. Further analysis of the company's cash management practices and working capital management may provide insights into the reasons behind the decline in the cash ratio and potential strategies to improve liquidity in the future.
Peer comparison
Sep 30, 2023