Stepan Company (SCL)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 851,883 | 1,044,800 | 913,368 | 905,651 | 818,789 |
| Total current liabilities | US$ in thousands | 607,870 | 670,649 | 500,476 | 416,554 | 339,114 |
| Current ratio | 1.40 | 1.56 | 1.82 | 2.17 | 2.41 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $851,883K ÷ $607,870K
= 1.40
The current ratio of Stepan Co. has been on a decreasing trend over the past five years, indicating a weakening liquidity position. The current ratio dropped from 2.41 in 2019 to 1.40 in 2023. A current ratio below 2 suggests that the company may have difficulties meeting its short-term obligations with its current assets alone.
The decreasing trend could be a cause for concern as it may indicate potential liquidity challenges or inefficiencies in managing current assets and liabilities. Further investigation into the company's working capital management practices and short-term liquidity needs may be necessary to better understand the reasons behind the declining current ratio.
Peer comparison
Dec 31, 2023