Meritage Corporation (MTH)

Cash ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash and cash equivalents	US$ in thousands	921,227	1,048,760	1,163,240	957,210	861,561	299,387	272,147	520,395	618,335	562,291	684,374	716,433	745,621	609,979	484,622	797,321	319,466	454,812	407,427	327,499
Short-term investments	US$ in thousands	—	—	—	—	11,753	11,356	11,223	5,631	5,764	—	—	—	—	—	—	—	—	—	—	—
Total current liabilities	US$ in thousands	641,619	755,408	662,000	653,181	671,843	733,506	729,393	717,313	595,896	578,984	531,941	541,167	496,445	467,668	439,690	405,496	405,278	451,615	360,854	343,496
Cash ratio		1.44	1.39	1.76	1.47	1.30	0.42	0.39	0.73	1.05	0.97	1.29	1.32	1.50	1.30	1.10	1.97	0.79	1.01	1.13	0.95

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 shown improvement over the quarters specified in the table. The cash ratio measures the company's ability to cover its short-term liabilities with cash or near-cash assets. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external financing.

In Q1 2022, the cash ratio was at 0.74, indicating that the company had sufficient cash or near-cash assets to cover 74% of its short-term liabilities. However, there was a decline in the cash ratio in Q2 2022 and Q3 2022, where it dropped to 0.38 and 0.42, respectively, indicating a potential liquidity strain during that period.

From Q4 2022 onwards, there was a notable improvement in the cash ratio, with values consistently above 1.0. The cash ratio peaked at 1.83 in Q2 2023, indicating a significant increase in the company's liquidity position and its ability to meet short-term obligations comfortably.

Overall, the upward trend in the cash ratio of Meritage Homes Corp. over the specified quarters suggests an improvement in the company's short-term liquidity position, which may enhance its financial flexibility and ability to navigate potential challenges.