Steel Dynamics Inc (STLD)

Cash ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash and cash equivalents	US$ in thousands	1,400,890	1,765,470	1,475,360	1,604,940	1,628,420	1,420,500	1,007,080	1,189,530	1,243,870	1,095,700	1,113,740	1,245,160	1,368,620	1,267,620	1,496,460	1,235,480	1,381,460	1,146,010	972,561	791,444
Short-term investments	US$ in thousands	721,210	500,844	611,701	714,769	628,215	583,211	351,005	351	—	—	—	—	0	—	69,546	219,193	262,174	69,529	114,154	173,723
Total current liabilities	US$ in thousands	2,332,300	1,918,380	1,759,040	1,820,550	2,032,300	2,131,400	2,201,870	2,090,650	2,227,370	2,054,290	1,852,240	1,661,190	1,258,790	1,175,630	1,115,430	1,031,720	1,006,700	1,005,280	925,736	1,003,090
Cash ratio		0.91	1.18	1.19	1.27	1.11	0.94	0.62	0.57	0.56	0.53	0.60	0.75	1.09	1.08	1.40	1.41	1.63	1.21	1.17	0.96

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,400,890K + $721,210K) ÷ $2,332,300K
= 0.91

The cash ratio of Steel Dynamics Inc. has shown variability over the past eight quarters. The cash ratio, which measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, ranged from a low of 0.61 in Q1 2022 to a high of 1.34 in Q1 2023.

Overall, the cash ratio has generally increased over the last two years, indicating a strengthening liquidity position for the company. The recent ratios above 1 suggest that Steel Dynamics Inc. has sufficient cash to cover its short-term obligations. This trend is positive as it indicates that the company has improved its ability to meet its immediate financial obligations with its available cash resources.

However, it is important to note that a very high cash ratio could also indicate an inefficient use of resources, as cash might be better utilized for investment opportunities or other productive purposes. Therefore, while a healthy cash ratio is essential for financial stability, it should be balanced with other key financial metrics for a comprehensive assessment of the company's financial health.