Steel Dynamics Inc (STLD)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	589,464	1,400,890	1,628,420	1,243,870	1,368,620
Short-term investments	US$ in thousands	147,811	721,210	628,215	351	0
Total current liabilities	US$ in thousands	2,150,580	2,332,300	2,032,300	2,227,370	1,258,790
Cash ratio		0.34	0.91	1.11	0.56	1.09

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($589,464K + $147,811K) ÷ $2,150,580K
= 0.34

The cash ratio of Steel Dynamics Inc has shown fluctuations over the past five years. As of December 31, 2020, the company had a cash ratio of 1.09, indicating that it had $1.09 in cash and cash equivalents for every $1 of current liabilities.

However, by December 31, 2021, the cash ratio had decreased to 0.56, suggesting a decrease in the proportion of liquid assets relative to current liabilities. This could indicate potential liquidity challenges or a shift in the company's cash management practices.

The cash ratio improved in the following years, reaching 1.11 by December 31, 2022, which could reflect better cash management or an increase in cash reserves during that period.

By December 31, 2023, the cash ratio decreased slightly to 0.91, indicating a lower level of liquidity compared to the previous year. This fluctuation may be due to changes in operating cash flows, investment activities, or debt management by the company.

Lastly, as of December 31, 2024, the cash ratio dropped significantly to 0.34, suggesting a potential liquidity risk for Steel Dynamics Inc. A low cash ratio could imply that the company may struggle to meet its short-term obligations with its available cash resources alone.

In summary, the trend in Steel Dynamics Inc's cash ratio over the five-year period highlights the importance of monitoring liquidity levels and cash management practices to ensure the company can meet its financial obligations effectively.