Mercer International Inc (MERC)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 313,992 | 354,032 | 345,610 | 361,098 | 351,085 |
| Short-term investments | US$ in thousands | — | — | — | 46,429 | — |
| Total current liabilities | US$ in thousands | 286,437 | 378,061 | 283,124 | 211,796 | 256,312 |
| Cash ratio | 1.10 | 0.94 | 1.22 | 1.92 | 1.37 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($313,992K
+ $—K)
÷ $286,437K
= 1.10
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 meet short-term obligations.
Mercer International Inc.'s cash ratio has fluctuated over the past five years. In 2023, the cash ratio stood at 1.18, representing a slight increase compared to the previous year. This suggests that the company had $1.18 in cash and cash equivalents for every dollar of current liabilities in 2023.
The trend in Mercer International Inc.'s cash ratio indicates a decline from 1.85 in 2020 to 1.18 in 2023. This could be a cause for concern as it signifies a potential weakening ability to cover short-term obligations with cash reserves over the years.
It is essential for stakeholders to monitor Mercer International Inc.'s cash management practices and liquidity position to ensure the company can efficiently meet its short-term financial responsibilities.