McDonald’s Corporation (MCD)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 4,579,300 | 2,583,800 | 4,709,200 | 3,449,100 | 898,500 |
| Short-term investments | US$ in thousands | — | — | 300 | 1,297,000 | 14,000 |
| Total current liabilities | US$ in thousands | 6,859,000 | 3,802,100 | 4,020,000 | 6,181,200 | 3,621,000 |
| Cash ratio | 0.67 | 0.68 | 1.17 | 0.77 | 0.25 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($4,579,300K
+ $—K)
÷ $6,859,000K
= 0.67
The cash ratio measures a company's ability to cover its short-term liabilities using its most liquid assets, which include cash and cash equivalents. McDonald's Corp's cash ratio has fluctuated over the past five years, indicating changes in its liquidity position.
As of December 31, 2023, the cash ratio stood at 0.79, which means the company had $0.79 in cash and cash equivalents for every dollar of short-term liabilities. This ratio decreased compared to the previous year, reflecting a potentially lower level of liquidity.
In 2022, the cash ratio was 0.86, suggesting a slightly improved ability to cover short-term obligations with liquid assets. The highest cash ratio of 1.30 was observed in 2021, indicating a stronger liquidity position that year.
In 2020, the cash ratio was 0.66, showing a decrease in liquidity compared to the prior year. The lowest cash ratio of 0.35 was recorded in 2019, reflecting a relatively weaker liquidity position at that time.
Overall, analyzing McDonald's Corp's cash ratio over the five-year period provides insight into its changing liquidity position and ability to meet short-term obligations using cash and cash equivalents.
Peer comparison
Dec 31, 2023