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.


Peer comparison

Feb 3, 2024

Company name
Symbol
Cash ratio
RH
RH
0.14
Haverty Furniture Companies Inc
HVT
0.87

See also:

RH Cash Ratio