PulteGroup Inc (PHM)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	1,806,580	1,053,100	1,779,090	2,582,200	1,217,910
Short-term investments	US$ in thousands	516,064	677,207	947,139	564,979	508,967
Total current liabilities	US$ in thousands	117,212	87,578	87,462	84,505	51,827
Cash ratio		19.82	19.76	31.17	37.24	33.32

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,806,580K + $516,064K) ÷ $117,212K
= 19.82

The cash ratio of PulteGroup Inc over the past five years has fluctuated, indicating varying levels of liquidity. The cash ratio measures the company's ability to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio suggests stronger liquidity and financial flexibility, as the company has more cash available to meet its immediate obligations.

In 2023, the cash ratio of 0.77 indicates that PulteGroup Inc had $0.77 of cash and cash equivalents for every $1 of current liabilities. This represents a moderate level of liquidity compared to the previous year. The decrease from 2022's ratio of 0.55 may suggest a lower level of cash on hand relative to its short-term obligations.

The cash ratio was highest in 2020 at 1.22, indicating a peak level of liquidity during that year. This high cash ratio suggests that the company had more than enough cash to cover its short-term liabilities, reflecting a strong financial position. The ratio then decreased in 2021 and 2023 but remained relatively stable in 2019.

Overall, the fluctuation in PulteGroup Inc's cash ratio over the past five years highlights the importance of monitoring changes in liquidity levels, as it can impact the company's ability to meet its obligations and seize potential investment opportunities.