Martin Marietta Materials Inc (MLM)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	1,271,800	358,000	258,400	207,300	21,000
Short-term investments	US$ in thousands	—	704,600	—	—	—
Total current liabilities	US$ in thousands	1,170,200	1,445,600	752,600	499,300	838,500
Cash ratio		1.09	0.74	0.34	0.42	0.03

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,271,800K + $—K) ÷ $1,170,200K
= 1.09

The cash ratio of Martin Marietta Materials, Inc. has shown fluctuations over the past five years. In 2019, the cash ratio was 0.19, indicating that the company had $0.19 in cash for every $1 of current liabilities. However, there was a significant improvement in 2023, with the cash ratio increasing to 1.16. This suggests that the company's liquidity position has strengthened, as it now has $1.16 in cash for every $1 of current liabilities.

The sharp increase in the cash ratio from 2022 to 2023 indicates that Martin Marietta Materials, Inc. may have increased its cash reserves or reduced its current liabilities during this period. A higher cash ratio is generally considered positive as it indicates the company's ability to cover its short-term obligations with cash on hand. It also suggests that the company is less reliant on external financing or the need to quickly convert other assets into cash to meet its short-term obligations.

Overall, the upward trend in Martin Marietta Materials, Inc.'s cash ratio from 2020 to 2023 reflects an improved liquidity position and a potentially stronger financial health. However, it may be important for stakeholders to further analyze the underlying causes of these changes to determine the company's ability to manage its cash effectively in the future.