Parker-Hannifin Corporation (PH)

Cash ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Cash and cash equivalents	US$ in thousands	422,027	475,182	535,799	733,117	685,514
Short-term investments	US$ in thousands	—	8,390	27,862	39,116	70,805
Total current liabilities	US$ in thousands	7,313,310	7,735,370	5,859,320	3,096,500	3,148,370
Cash ratio		0.06	0.06	0.10	0.25	0.24

June 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($422,027K + $—K) ÷ $7,313,310K
= 0.06

The cash ratio of Parker-Hannifin Corporation has shown a declining trend over the past five years, decreasing from 0.24 in 2020 to 0.06 in 2024. This indicates that the company's ability to cover its short-term liabilities with its cash and cash equivalents has weakened over this period. A cash ratio of 0.06 in 2024 means that for every dollar of current liabilities, Parker-Hannifin only has $0.06 in cash and cash equivalents available for immediate use. This suggests a relatively low level of liquidity and raises concerns about the company's ability to meet its short-term financial obligations solely from its cash reserves. Further analysis of the company's overall liquidity position and cash management practices would be necessary to fully assess the implications of the declining cash ratio.