Powell Industries Inc (POWL)
Cash ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 315,331 | 245,875 | 101,954 | 114,314 | 160,216 |
| Short-term investments | US$ in thousands | 43,061 | 33,134 | 14,554 | 19,667 | 18,705 |
| Total current liabilities | US$ in thousands | 428,015 | 395,686 | 186,373 | 121,156 | 152,947 |
| Cash ratio | 0.84 | 0.71 | 0.63 | 1.11 | 1.17 |
September 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($315,331K
+ $43,061K)
÷ $428,015K
= 0.84
The cash ratio of Powell Industries Inc has been fluctuating over the past five years. In 2024, the cash ratio stands at 0.84, indicating that for every dollar of current liabilities, the company has $0.84 in cash and cash equivalents to cover its short-term obligations. The trend shows an improvement compared to the prior year at 0.71 but is lower than the levels seen in 2020 and 2021, where the cash ratio was 1.11 and 1.17 respectively.
A cash ratio below 1 suggests that Powell Industries Inc may not have enough liquid assets to cover its current liabilities, which could potentially raise concerns about its short-term liquidity position. It is essential for the company to monitor its cash position closely to ensure it can meet its financial obligations as they come due. Additionally, management may need to assess their cash management strategies and working capital efficiency to improve the cash ratio and strengthen the company's liquidity position.
Peer comparison
Sep 30, 2024