Regal Beloit Corporation (RRX)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 574,000 | 688,500 | 672,800 | 611,300 | 331,400 |
| Short-term investments | US$ in thousands | — | — | — | — | 8,800 |
| Total current liabilities | US$ in thousands | 1,326,400 | 1,002,200 | 1,095,300 | 822,000 | 560,500 |
| Cash ratio | 0.43 | 0.69 | 0.61 | 0.74 | 0.61 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($574,000K
+ $—K)
÷ $1,326,400K
= 0.43
The cash ratio of Regal Rexnord Corp has exhibited some fluctuations over the past five years. The cash ratio indicates the company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio is generally preferred as it signifies a stronger liquidity position.
In 2023, the cash ratio decreased to 0.62 from 0.85 in 2022, indicating a lower ability to cover short-term liabilities with cash. This may suggest a decrease in the company's cash reserves relative to its current liabilities. However, it is essential to further investigate the reasons behind this decline.
Compared to previous years, the cash ratio in 2023 is below the ratios reported in 2021 and 2019, indicating a potential deterioration in the company's liquidity position. Understanding the reasons behind these fluctuations and the company's cash management practices is crucial to assess its ability to meet its short-term obligations and weather financial challenges.
Peer comparison
Dec 31, 2023