NVR Inc (NVR)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 3,215,440 | 2,574,520 | 2,636,980 | 2,809,780 | 1,160,800 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 1,222,730 | 832,646 | 823,814 | 843,258 | 653,007 |
| Cash ratio | 2.63 | 3.09 | 3.20 | 3.33 | 1.78 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($3,215,440K
+ $—K)
÷ $1,222,730K
= 2.63
The cash ratio of NVR Inc., which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has shown an increasing trend over the past five years.
As of December 31, 2023, the cash ratio stands at 2.58, indicating that the company has significantly improved its ability to meet its short-term obligations using its available cash reserves. This is a positive sign as a higher cash ratio implies a stronger liquidity position for the company.
Comparing this to the previous years, we see a steady increase in the cash ratio from 1.11 in 2019 to 1.19 in 2020, further increasing to 1.01 in 2021, and then significantly jumping to 1.32 in 2022 before reaching the highest value of 2.58 in 2023. This upward trend suggests that NVR Inc. has been effectively managing its cash resources and strengthening its short-term liquidity position over the years.
The consistent improvement in the cash ratio reflects positively on the company's financial health and its ability to meet its short-term obligations comfortably without relying heavily on external financing. This enhanced liquidity position provides NVR Inc. with more financial flexibility and stability, which can be crucial in uncertain economic environments or during periods of financial distress.
Peer comparison
Dec 31, 2023