Standard Motor Products Inc (SMP)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	921,924	744,223	762,439	711,205	598,536
Total current liabilities	US$ in thousands	436,472	304,263	323,131	476,369	302,602
Current ratio		2.11	2.45	2.36	1.49	1.98

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $921,924K ÷ $436,472K
= 2.11

Standard Motor Products Inc's current ratio has shown fluctuations over the past five years. It stood at 1.98 on December 31, 2020, indicating that the company had $1.98 in current assets to cover each dollar of current liabilities. However, the ratio decreased to 1.49 on December 31, 2021, raising concerns about the company's short-term liquidity.

Subsequently, there was a significant improvement in the current ratio, reaching 2.36 on December 31, 2022, and further increasing to 2.45 on December 31, 2023. These higher ratios suggest that the company was better positioned to meet its short-term obligations with its current assets during these periods.

However, on December 31, 2024, the current ratio decreased slightly to 2.11, although it remained above 2, indicating that Standard Motor Products Inc still had a relatively strong ability to cover its short-term liabilities with its current assets.

Overall, the fluctuations in Standard Motor Products Inc's current ratio over the years highlight the importance of monitoring liquidity and managing current assets and liabilities effectively to ensure financial stability.