Scotts Miracle-Gro Company (SMG)
Cash ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 71,600 | 31,900 | 86,800 | 244,100 | 16,600 |
| Short-term investments | US$ in thousands | — | 16,700 | 117,000 | 207 | — |
| Total current liabilities | US$ in thousands | 750,300 | 773,700 | 963,900 | 1,140,400 | 950,400 |
| Cash ratio | 0.10 | 0.06 | 0.21 | 0.21 | 0.02 |
September 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($71,600K
+ $—K)
÷ $750,300K
= 0.10
The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations.
Scotts Miracle-Gro Company's cash ratio has fluctuated over the past five years, ranging from 0.02 to 0.21. In 2020, the cash ratio was quite low at 0.02, indicating a weaker liquidity position. However, there was a significant improvement in 2022 and 2021, where the cash ratio stood at 0.21, signaling a healthier liquidity position to cover short-term liabilities.
In 2023, the cash ratio decreased to 0.06, possibly indicating a temporary decrease in cash holdings or an increase in short-term liabilities. In the most recent fiscal year, ending in 2024, the cash ratio increased to 0.10, showing a slight improvement in liquidity compared to the previous year but still lower than the peak in 2021 and 2022.
Overall, while Scotts Miracle-Gro Company's cash ratio has shown some variability over the years, the company has generally demonstrated the ability to cover its short-term liabilities with its cash and cash equivalents, with 2021 and 2022 being standout years for liquidity strength. It is important for the company to maintain a healthy cash ratio to ensure it can meet its short-term obligations effectively.
Peer comparison
Sep 30, 2024