Ingevity Corp (NGVT)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 95,900 | 76,700 | 275,400 | 257,700 | 56,500 |
| Short-term investments | US$ in thousands | — | — | — | 200 | 400 |
| Total current liabilities | US$ in thousands | 362,900 | 303,500 | 268,900 | 223,400 | 215,500 |
| Cash ratio | 0.26 | 0.25 | 1.02 | 1.15 | 0.26 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($95,900K
+ $—K)
÷ $362,900K
= 0.26
The cash ratio measures a company's ability to cover its short-term liabilities using its available cash and cash equivalents. In this case, Ingevity Corp's cash ratio has fluctuated over the past five years, indicating changes in its liquidity position.
Ingevity Corp's cash ratio was 0.46 as of December 31, 2023, up from 0.39 in the previous year. This suggests that the company had $0.46 in cash and cash equivalents for every dollar of current liabilities in 2023.
Comparing this to previous years, the cash ratio was significantly higher in 2021 and 2020 at 1.20 and 1.30 respectively, indicating a stronger liquidity position during those periods. In 2019, the cash ratio was closer to the 2023 level at 0.43.
The decrease in the cash ratio from 2021 to 2023 may raise some concerns about Ingevity Corp's ability to cover its short-term obligations with its available cash resources. It is important for stakeholders to monitor the trend in the company's cash ratio over time to assess its financial health and liquidity management.
Peer comparison
Dec 31, 2023