MSC Industrial Direct Company Inc (MSM)
Cash ratio
| Aug 31, 2024 | Sep 2, 2023 | Sep 3, 2022 | Aug 28, 2021 | Aug 29, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 29,588 | 50,052 | 43,537 | 40,536 | 125,211 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 605,427 | 649,436 | 725,944 | 561,928 | 408,733 |
| Cash ratio | 0.05 | 0.08 | 0.06 | 0.07 | 0.31 |
August 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($29,588K
+ $—K)
÷ $605,427K
= 0.05
The cash ratio of MSC Industrial Direct Company Inc has fluctuated over the past five years, ranging from 0.05 to 0.31. The cash ratio measures the 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 using cash on hand.
In this case, the company's cash ratio has varied, with the lowest ratio of 0.05 in Aug 31, 2024, suggesting a relatively weaker ability to cover short-term liabilities with available cash compared to previous years. Conversely, the highest ratio of 0.31 in Aug 29, 2020, indicates a stronger cash position in that year.
The downward trend in the cash ratio from 0.31 in 2020 to 0.05 in 2024 may raise concerns about the company's liquidity position. It is essential for investors and analysts to closely monitor this ratio to assess the company's ability to meet its short-term obligations and manage its cash effectively. Further analysis and investigation into the company's cash management practices may be necessary to understand the reasons behind the fluctuations in the cash ratio.
Peer comparison
Aug 31, 2024