Mercer International Inc (MERC)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 1,092,900 | 1,178,180 | 1,064,300 | 874,852 | 844,697 |
| Total current liabilities | US$ in thousands | 286,437 | 378,061 | 283,124 | 211,796 | 256,312 |
| Current ratio | 3.82 | 3.12 | 3.76 | 4.13 | 3.30 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $1,092,900K ÷ $286,437K
= 3.82
The current ratio of Mercer International Inc. has fluctuated over the past five years, ranging from 3.12 to 4.13. The current ratio measures the company's ability to cover its short-term liabilities with its current assets. A higher current ratio indicates stronger liquidity and financial health as it suggests a greater ability to meet short-term obligations.
In 2023, Mercer International Inc. had a current ratio of 3.82, which implies that the company had $3.82 in current assets for every $1 in current liabilities. This indicates an improvement compared to the previous year, where the current ratio was 3.12. The increase in the current ratio may signify better management of current assets or a reduction in short-term liabilities.
Despite the improvement in 2023, the current ratio remains below the 4.13 ratio recorded in 2020. This could suggest that Mercer International Inc. had slightly less liquidity in 2023 compared to 2020. However, the current ratio of 3.82 is still relatively strong, indicating that the company is in a favorable position to meet its short-term financial obligations.
It is essential for investors and stakeholders to continue monitoring Mercer International Inc.'s current ratio over time to assess the company's liquidity and ability to manage its operational needs.