Sally Beauty Holdings Inc (SBH)
Cash ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 123,001 | 70,558 | 400,959 | 514,151 | 71,495 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 579,257 | 667,914 | 664,881 | 563,362 | 456,079 |
| Cash ratio | 0.21 | 0.11 | 0.60 | 0.91 | 0.16 |
September 30, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($123,001K
+ $—K)
÷ $579,257K
= 0.21
The cash ratio of Sally Beauty Holdings Inc has exhibited variability over the past five years. The ratio, which measures the company's ability to cover its short-term liabilities with its cash and cash equivalents, was 0.31 as of September 30, 2023, indicating that the company had $0.31 in cash and cash equivalents for every $1 of current liabilities. This represented a significant improvement from the prior year, when the cash ratio was 0.19. However, compared to September 30, 2021, when the ratio was 0.67, and September 30, 2020, when it was 1.00, the current ratio has declined. The lowest cash ratio in the past five years was in September 30, 2019, at 0.23.
The decreasing trend in the cash ratio from 2020 to 2023 suggests that the company may have been less able to cover its short-term obligations with its cash and cash equivalents. This could be an indication of potential liquidity concerns.
It is important to note that while a higher cash ratio is generally preferred as it reflects better liquidity, excessively high levels of cash relative to current liabilities might indicate that the company is not effectively using its resources. Therefore, a thorough analysis of the company's overall financial health and cash management practices is necessary to fully understand the implications of the cash ratio trend.
Peer comparison
Sep 30, 2023