NewMarket Corporation (NEU)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 111,936 | 68,712 | 83,304 | 125,172 | 144,397 |
| Short-term investments | US$ in thousands | -371,493 | 0 | 375,918 | 0 | — |
| Total current liabilities | US$ in thousands | 364,164 | 423,887 | 725,087 | 312,455 | 308,895 |
| Cash ratio | -0.71 | 0.16 | 0.63 | 0.40 | 0.47 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($111,936K
+ $-371,493K)
÷ $364,164K
= -0.71
The cash ratio of NewMarket Corp. has shown fluctuations over the past five years, ranging from a low of 0.25 in 2022 to a high of 0.69 in 2021. This ratio indicates the company's ability to cover its short-term obligations with its cash and cash equivalents. A cash ratio of 0.41 in 2023 indicates that NewMarket Corp. has $0.41 of cash and cash equivalents for every $1 of current liabilities.
The increase in the cash ratio from 2022 to 2023 suggests an improvement in the company's liquidity position, as it now has a higher proportion of cash to cover its short-term obligations. However, it is important to note that a very high cash ratio could also indicate that the company is not effectively utilizing its cash resources to generate returns.
Overall, analysis of the cash ratio for NewMarket Corp. indicates fluctuations in liquidity levels over the five-year period, with the company's ability to cover short-term obligations varying from year to year. Further examination of the company's cash management practices and overall financial health would provide a more comprehensive understanding of its liquidity position.
Peer comparison
Dec 31, 2023