LKQ Corporation (LKQ)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 299,000 | 278,000 | 274,000 | 312,000 | 523,387 |
| Short-term investments | US$ in thousands | — | — | — | 155,224 | — |
| Total current liabilities | US$ in thousands | 3,318,000 | 2,271,000 | 2,165,000 | 1,988,490 | 2,178,510 |
| Cash ratio | 0.09 | 0.12 | 0.13 | 0.23 | 0.24 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($299,000K
+ $—K)
÷ $3,318,000K
= 0.09
The cash ratio measures a company's ability to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio indicates a stronger ability to repay its current obligations.
Looking at the trend of LKQ Corp's cash ratio over the past five years, we observe a decline from 0.36 in 2019 to 0.18 in 2023. This suggests a decreasing ability to cover short-term liabilities solely with cash and cash equivalents.
The decrease in the cash ratio could be concerning as it may indicate potential issues with liquidity management or a decrease in the company's cash holdings relative to its short-term obligations. It is important for investors and stakeholders to monitor this trend closely to assess the company's financial health and ability to meet its short-term obligations.