NVR Inc (NVR)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 2,664,670 | 3,215,440 | 2,574,520 | 2,636,980 | 2,809,780 |
| Short-term investments | US$ in thousands | — | 52,550 | — | — | — |
| Total current liabilities | US$ in thousands | 332,772 | 1,222,730 | 832,646 | 823,814 | 843,258 |
| Cash ratio | 8.01 | 2.67 | 3.09 | 3.20 | 3.33 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,664,670K
+ $—K)
÷ $332,772K
= 8.01
The cash ratio of NVR Inc, a key liquidity ratio, has demonstrated fluctuations over the past five years. In 2020, the cash ratio stood at 3.33, indicating that the company had $3.33 in cash and cash equivalents for every $1 of current liabilities. By the end of 2021, the ratio slightly decreased to 3.20, signaling a marginal decline in the company's ability to cover its short-term obligations with its available cash.
Further, the cash ratio continued to decrease to 3.09 by the end of 2022 and declined even more significantly to 2.67 by the end of 2023. These declines suggest potential liquidity challenges for NVR Inc during these periods, as the company may have had less liquidity available to meet its short-term obligations.
However, there was a notable improvement in NVR Inc's cash ratio by the end of 2024, where the ratio spiked to 8.01. This sharp increase indicates a robust improvement in the company's liquidity position, with a significant increase in its cash and cash equivalents relative to its current liabilities.
Overall, the fluctuation in NVR Inc's cash ratio over the five-year period indicates varying levels of liquidity risk and management effectiveness, with the company showing both periods of relative strength and weakness in its ability to cover short-term obligations with available cash.
Peer comparison
Dec 31, 2024