RH (RH)

Cash ratio

Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Cash and cash equivalents US$ in thousands 123,688 1,508,100 2,177,890 100,446 47,658
Short-term investments US$ in thousands
Total current liabilities US$ in thousands 872,868 885,973 1,063,760 921,632 982,912
Cash ratio 0.14 1.70 2.05 0.11 0.05

February 3, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($123,688K + $—K) ÷ $872,868K
= 0.14

The cash ratio measures the company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external financing.

Based on the data provided:
- The cash ratio for RH has fluctuated over the past five years, ranging from 0.05 to 2.05.
- In January 2022, the cash ratio was the highest at 2.05, indicating an ample amount of cash to cover short-term liabilities.
- The cash ratio dropped significantly in January 2021 to 0.11, suggesting a decreased ability to cover short-term obligations with cash resources.
- The cash ratio improved in January 2023 to 1.70, indicating a recovery in the company's liquidity position.
- As of February 2024, the cash ratio stands at 0.14, which is relatively lower compared to the previous year but still indicates a moderate ability to meet short-term liabilities with available cash.

Overall, while the cash ratio of RH has experienced fluctuations, it is essential for the company to maintain a balance between having enough cash to cover short-term obligations and investing excess cash for future growth opportunities.


See also:

RH Cash Ratio