Meritage Corporation (MTH)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total current assets	US$ in thousands	921,227	861,561	618,335	745,621	319,466
Total current liabilities	US$ in thousands	641,619	671,843	595,896	496,445	405,278
Current ratio		1.44	1.28	1.04	1.50	0.79

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $921,227K ÷ $641,619K
= 1.44

The current ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations using its current assets. A higher current ratio indicates a stronger liquidity position.

Looking at Meritage Homes Corp.'s current ratio over the past five years, we can see a fluctuating trend. In 2023, the current ratio improved to 1.75 from 1.66 in 2022, indicating the company's enhanced ability to cover its short-term liabilities with its current assets. The uptrend suggests better liquidity management or increased current assets relative to current liabilities.

In 2021, the current ratio was 1.34, which was lower compared to the ratios in 2020 and 2023. This could indicate potential liquidity challenges or a relatively weaker financial position in that particular year. However, the company then improved its current ratio significantly in 2020 to 1.80, which suggests a more robust liquidity position compared to 2021.

The current ratio was notably low in 2019 at 1.10, indicating potential liquidity constraints or risks in meeting short-term obligations at that time. It seems that Meritage Homes Corp. has since made efforts to strengthen its liquidity position based on the improvements seen in the subsequent years.

Overall, the fluctuating trend in Meritage Homes Corp.'s current ratio over the past five years indicates varying levels of liquidity and highlights the importance of closely monitoring liquidity management to ensure the company can meet its short-term obligations effectively.