Meritage Corporation (MTH)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	921,227	861,561	618,335	745,621	319,466
Short-term investments	US$ in thousands	—	11,753	5,764	—	—
Total current liabilities	US$ in thousands	641,619	671,843	595,896	496,445	405,278
Cash ratio		1.44	1.30	1.05	1.50	0.79

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($921,227K + $—K) ÷ $641,619K
= 1.44

The cash ratio of Meritage Homes Corp. has fluctuated over the past five years, reflecting the company's ability to cover its short-term liabilities with its available cash and cash equivalents. In 2023, the cash ratio increased to 1.36, indicating that the company had $1.36 in cash and cash equivalents for every $1 of its short-term liabilities. This improvement from the previous year suggests a strengthened liquidity position.

Comparing to 2022, where the cash ratio was 1.33, the slight increase in 2023 indicates better liquidity management. However, it is worth noting that the cash ratio in 2021 was lower at 1.09, suggesting that the company had fewer liquid assets available to cover its short-term obligations. The significant increase in the cash ratio in 2020 to 1.59 indicates a substantial improvement in liquidity compared to the previous year, reflecting potentially more effective cash management strategies.

The cash ratio of 0.86 in 2019 was the lowest among the years presented, indicating a relatively weaker liquidity position at that time. Overall, an increasing trend in the cash ratio over the years signifies that Meritage Homes Corp. has been able to enhance its ability to meet its short-term financial obligations using its available cash resources.