Papa John's International Inc (PZZA)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	40,587	47,373	70,610	130,204	27,911
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	304,596	265,157	287,424	288,869	207,945
Cash ratio		0.13	0.18	0.25	0.45	0.13

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($40,587K + $—K) ÷ $304,596K
= 0.13

The cash ratio of Papa John's International, Inc. has fluctuated over the past five years, indicating variations in the company's ability to cover its short-term liabilities with cash and cash equivalents.

In 2023, the cash ratio decreased to 0.27 from 0.35 in 2022, suggesting a decrease in the company's immediate liquidity position. This could be a cause for concern as it indicates a lower ability to meet short-term obligations solely from its cash reserves.

Comparing to previous years, the cash ratio in 2023 is lower than in 2021 and significantly lower than in 2020, when the ratio was 0.60, showing a notable decline in liquidity. However, it is slightly higher than in 2019, which had a cash ratio of 0.29.

Overall, the decreasing trend in the cash ratio of Papa John's International, Inc. from 2020 to 2023 raises questions about the company's liquidity management and ability to cover its short-term obligations solely from its available cash and cash equivalents. Further analysis of the company's cash flow position and potential liquidity constraints may be necessary to fully understand the implications of these changes.