NOV Inc. (NOV)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 816,000 | 1,069,000 | 1,591,000 | 1,692,000 | 1,171,000 |
| Short-term investments | US$ in thousands | — | — | — | 51,000 | 8,000 |
| Total current liabilities | US$ in thousands | 2,435,000 | 2,437,000 | 1,910,000 | 1,867,000 | 2,247,000 |
| Cash ratio | 0.34 | 0.44 | 0.83 | 0.93 | 0.52 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($816,000K
+ $—K)
÷ $2,435,000K
= 0.34
The cash ratio of NOV Inc has displayed a declining trend over the past five years, decreasing from 1.35 in 2020 to 0.73 in 2023. This ratio indicates the company's ability to cover its short-term obligations using its cash and cash equivalents. A cash ratio below 1 suggests that the company may have difficulty meeting its short-term obligations solely with cash on hand.
The decrease in the cash ratio may signal a potential liquidity concern for NOV Inc, as it indicates a lower level of liquid assets available to cover its immediate liabilities. However, it is important to consider other factors such as the company's cash flow position, operating cycle, and overall financial health in conjunction with the cash ratio to assess its liquidity position accurately. Further analysis is recommended to gain a deeper understanding of NOV Inc's liquidity management and financial performance.
Peer comparison
Dec 31, 2023