Nordson Corporation (NDSN)
Cash ratio
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 115,952 | 115,679 | 163,457 | 299,972 | 208,293 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 528,477 | 582,089 | 834,203 | 445,394 | 363,089 |
| Cash ratio | 0.22 | 0.20 | 0.20 | 0.67 | 0.57 |
October 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($115,952K
+ $—K)
÷ $528,477K
= 0.22
The cash ratio of Nordson Corporation has exhibited fluctuations over the past five years, ranging from a low of 0.20 in October 2023 and October 2022 to a high of 0.67 in October 2021. The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger liquidity position, suggesting the company has more than enough cash to meet its short-term obligations without relying on external sources.
In the case of Nordson Corporation, the decreasing trend in the cash ratio from 0.67 in October 2021 to 0.22 in October 2024 may raise concerns about its liquidity management. A lower cash ratio could imply that the company is potentially facing challenges in generating sufficient cash flow or maintaining an adequate level of cash reserves to cover its short-term debt obligations.
It is essential for stakeholders to closely monitor Nordson Corporation's cash management practices and assess the overall efficiency of its working capital management to ensure the company can meet its financial commitments and sustain its operations effectively.
Peer comparison
Oct 31, 2024