Polaris Industries Inc (PII)
Cash ratio
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
Cash and cash equivalents | US$ in thousands | 367,800 | 324,500 | 502,300 | 631,700 | 157,100 |
Short-term investments | US$ in thousands | — | 5,900 | 6,900 | 3,000 | — |
Total current liabilities | US$ in thousands | 1,933,800 | 2,328,600 | 2,230,100 | 1,889,400 | 1,528,000 |
Cash ratio | 0.19 | 0.14 | 0.23 | 0.34 | 0.10 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($367,800K
+ $—K)
÷ $1,933,800K
= 0.19
The cash ratio of Polaris Inc has fluctuated over the past five years, ranging from 0.19 in 2019 to 0.41 in 2020. The trend shows a decrease in 2021 with a ratio of 0.30, followed by a further decline in 2022 to 0.22, and a slight increase to 0.29 in 2023.
The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of financing.
Based on the historical data provided, Polaris Inc's cash ratio has been relatively volatile, possibly indicating fluctuations in its liquidity position. The downward trend from 2020 to 2022 may raise concerns about the company's short-term liquidity management. However, the slight improvement in the cash ratio in 2023 is a positive sign, suggesting a potential enhancement in the company's ability to cover its short-term liabilities with available cash.
It would be advisable for stakeholders to closely monitor Polaris Inc's cash management practices to ensure sufficient liquidity to meet its short-term obligations effectively.