Stepan Company (SCL)
Current ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 851,883 | 849,436 | 938,722 | 1,006,520 | 1,044,800 | 1,072,750 | 1,087,370 | 1,081,870 | 913,368 | 839,213 | 815,855 | 797,653 | 905,651 | 833,036 | 796,376 | 768,544 | 818,789 | 798,028 | 806,807 | 808,136 |
| Total current liabilities | US$ in thousands | 607,870 | 582,077 | 642,037 | 662,744 | 670,649 | 603,245 | 638,228 | 611,062 | 500,476 | 491,065 | 464,501 | 464,089 | 416,554 | 361,166 | 319,172 | 310,158 | 339,114 | 292,963 | 299,466 | 295,448 |
| Current ratio | 1.40 | 1.46 | 1.46 | 1.52 | 1.56 | 1.78 | 1.70 | 1.77 | 1.82 | 1.71 | 1.76 | 1.72 | 2.17 | 2.31 | 2.50 | 2.48 | 2.41 | 2.72 | 2.69 | 2.74 |
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 exhibited a declining trend over the past four quarters, decreasing from 1.77 in Q1 2022 to 1.40 in Q4 2023. This indicates that the company's liquidity position has weakened over this period, with a decrease in the ability to meet its short-term obligations using current assets.
While a current ratio above 1.0 generally suggests that a company can cover its short-term liabilities with its current assets, the decreasing trend should prompt further analysis. A current ratio of 1.40 in Q4 2023 indicates that for every dollar of current liabilities, the company has $1.40 of current assets available to meet those obligations.
Further investigation into the cause of this trend is warranted to determine whether it is a result of changes in the company's current assets or liabilities. Management should closely monitor the current ratio going forward to ensure that the company maintains adequate liquidity to meet its short-term financial obligations.
Peer comparison
Dec 31, 2023