Standard Motor Products Inc (SMP)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total current assets	US$ in thousands	744,223	762,439	711,205	598,536	540,557
Total current liabilities	US$ in thousands	304,263	323,131	476,369	302,602	300,588
Current ratio		2.45	2.36	1.49	1.98	1.80

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $744,223K ÷ $304,263K
= 2.45

Standard Motor Products, Inc.'s current ratio has shown fluctuating trends over the past five years. The current ratio measures the company's ability to meet its short-term obligations using its current assets. A higher current ratio is generally favorable as it indicates a stronger ability to cover short-term liabilities.

In 2023, the current ratio improved to 2.45 from 2.36 in 2022, suggesting that the company had increased liquidity and a better ability to pay off its short-term obligations. This improvement can be attributed to an increase in current assets or a decrease in current liabilities, or possibly a combination of both.

The current ratio was significantly lower in 2021 at 1.49, indicating potential liquidity challenges or an inability to meet short-term obligations efficiently. However, there was a positive rebound in 2022 and 2023.

Overall, while the current ratio has shown some variability over the years, the recent improvement in 2023 reflects a healthier liquidity position for Standard Motor Products, Inc., highlighting its enhanced ability to cover short-term liabilities with current assets.