Parker-Hannifin Corporation (PH)

Cash ratio

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Cash and cash equivalents	US$ in thousands	467,000	422,027	475,182	535,799	733,117
Short-term investments	US$ in thousands	—	-1,034,170	8,390	27,862	39,116
Total current liabilities	US$ in thousands	5,819,000	7,313,310	7,735,370	5,859,320	3,096,500
Cash ratio		0.08	-0.08	0.06	0.10	0.25

June 30, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($467,000K + $—K) ÷ $5,819,000K
= 0.08

The cash ratio of Parker-Hannifin Corporation has experienced significant fluctuations over the observed period from June 30, 2021, to June 30, 2025.

As of June 30, 2021, the company's cash ratio stood at 0.25, indicating that cash and cash equivalents covered 25% of its current liabilities. This suggests a moderate level of liquidity in terms of immediate cash available to meet short-term obligations.

By June 30, 2022, the cash ratio declined markedly to 0.10, reflecting a decreased level of liquidity relative to current liabilities. This reduction may point to either a decrease in cash holdings, an increase in current liabilities, or a combination of both, indicating a potential tightening in liquidity position.

The downward trend continued into June 30, 2023, with the cash ratio diminishing further to 0.06. At this point, the company's ability to cover current liabilities solely with cash and equivalents was considerably limited, raising concerns about liquidity in the short term.

The situation further deteriorated by June 30, 2024, when the cash ratio turned negative at -0.08. A negative cash ratio is unusual and suggests that the company's current liabilities exceed its cash and cash equivalents by a substantial margin, indicating a potentially strained liquidity position. This could be attributable to the company's cash position being insufficient to cover immediate obligations, possibly due to increased liabilities or reduced cash reserves.

Interestingly, by June 30, 2025, the cash ratio rebounded to 0.08, signifying a modest improvement in liquidity levels. Although still low, this increase points toward some recovery or restructuring in cash holdings relative to current liabilities.

Overall, the company's cash ratio trend over this period reflects a deterioration in liquidity, reaching a nadir in mid-2024, followed by a partial rebound. The negative cash ratio noted in 2024 underscores potential liquidity risks during that interval, highlighting the importance of further examining the company’s cash management and short-term liabilities management strategies.