O’Reilly Automotive Inc (ORLY)

Cash ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cash and cash equivalents	US$ in thousands	130,245	115,613	145,042	89,264	279,132	82,664	57,880	59,872	108,583	67,060	253,904	191,546	362,113	449,302	631,618	610,880	465,640	1,627,100	872,423	287,067
Short-term investments	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total current liabilities	US$ in thousands	8,283,500	8,185,160	8,123,210	7,888,390	7,661,350	7,831,080	7,693,700	7,356,310	7,063,820	6,841,480	6,413,190	6,170,870	5,874,620	5,989,750	5,771,610	5,903,080	5,262,420	5,669,380	5,022,140	4,624,930
Cash ratio		0.02	0.01	0.02	0.01	0.04	0.01	0.01	0.01	0.02	0.01	0.04	0.03	0.06	0.08	0.11	0.10	0.09	0.29	0.17	0.06

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($130,245K + $—K) ÷ $8,283,500K
= 0.02

The cash ratio of O’Reilly Automotive Inc has fluctuated over the years based on the provided data. The cash ratio indicates the proportion of a company’s current assets held in cash and cash equivalents. A higher cash ratio is generally preferred as it suggests a company has enough liquid assets to cover its short-term liabilities.

In the case of O’Reilly Automotive Inc, the cash ratio has ranged from a low of 0.01 to a high of 0.29 during the period from March 31, 2020, to December 31, 2024. The ratio started at 0.06 on March 31, 2020, increased to 0.29 by September 30, 2020, which indicates a significant improvement in the company's liquidity position. However, the ratio declined thereafter and fluctuated between 0.01 and 0.11 until December 31, 2024.

The declining trend in the cash ratio from its peak may be attributed to various factors such as increased investments in working capital, capital expenditures, or potential acquisitions. A lower cash ratio could indicate that the company might be using its cash for operational needs or expansion opportunities rather than keeping it in highly liquid assets.

It would be essential for O’Reilly Automotive Inc to monitor its cash ratio closely to ensure it maintains a healthy level of liquidity to meet its short-term obligations and navigate unexpected financial challenges effectively. Additionally, the company may need to evaluate its cash management strategies to optimize its liquidity position and strike a balance between investments and maintaining an adequate cash buffer.