Penske Automotive Group Inc (PAG)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	96,400	106,500	100,700	49,500	28,100
Short-term investments	US$ in thousands	—	—	—	1,500,000	—
Total current liabilities	US$ in thousands	5,657,900	4,713,100	4,274,600	4,674,900	5,451,000
Cash ratio		0.02	0.02	0.02	0.33	0.01

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($96,400K + $—K) ÷ $5,657,900K
= 0.02

The cash ratio for Penske Automotive Group Inc has remained relatively stable in recent years, standing at 0.05 for the past three years (2021, 2022, and 2023). This indicates that the company has $0.05 of cash for every $1 of current liabilities. The gradual increase in the cash ratio from 0.02 in 2019 to 0.05 in 2021 suggests an improvement in the company's ability to cover its short-term obligations with cash.

A cash ratio of 0.05 signifies that Penske Automotive Group Inc has a moderate level of liquidity, indicating that it may not have excess cash on hand compared to its current liabilities. While a higher cash ratio could provide a cushion for unexpected expenses or economic downturns, a cash ratio of 0.05 suggests that the company has limited liquid resources relative to its short-term obligations.

Overall, while the stability of the cash ratio is a positive sign of consistency in managing liquidity, Penske Automotive Group Inc may benefit from further optimizing its cash position to enhance its ability to meet short-term financial obligations efficiently.