Simpson Manufacturing Company Inc (SSD)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 429,822 | 300,742 | 301,155 | 274,639 | 230,210 |
| Short-term investments | US$ in thousands | — | 300,742 | 301,155 | 2,466 | — |
| Total current liabilities | US$ in thousands | 361,257 | 348,563 | 244,602 | 194,061 | 158,907 |
| Cash ratio | 1.19 | 1.73 | 2.46 | 1.43 | 1.45 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($429,822K
+ $—K)
÷ $361,257K
= 1.19
The cash ratio measures a company's ability to cover its current liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources.
Simpson Manufacturing Co., Inc.'s cash ratio has varied over the past five years. In 2023, the cash ratio improved to 1.32 from 1.01 in 2022, indicating a better liquidity position. However, this ratio is still lower than the levels observed in 2020 and 2019 when it stood at 1.57 each year. This suggests that Simpson Manufacturing Co., Inc. may have reduced its cash holdings relative to its current liabilities compared to those previous years.
Overall, while the cash ratio of 1.32 in 2023 shows that Simpson Manufacturing Co., Inc. has a sufficient amount of cash to cover its short-term obligations, the downward trend from the higher ratios seen in 2020 and 2019 warrants further monitoring to ensure the company maintains adequate liquidity in the future.
Peer comparison
Dec 31, 2023