TRI Pointe Homes Inc (TPH)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	868,953	889,664	681,528	621,295	329,011
Short-term investments	US$ in thousands	—	129,837	118,095	—	—
Total current liabilities	US$ in thousands	43,991	42,027	55,156	43,602	20,876
Cash ratio		19.75	24.26	14.50	14.25	15.76

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($868,953K + $—K) ÷ $43,991K
= 19.75

Tri Pointe Homes Inc.'s cash ratio has exhibited a fluctuating trend over the past five years. The cash ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents, providing insights into its liquidity position.

In 2023, the cash ratio stood at 2.07, indicating that the company had $2.07 in cash and cash equivalents for every $1 of current liabilities. This represents a decrease from the prior year's ratio of 2.24 in 2022. Despite the slight decline, the cash ratio remains above 2, suggesting that Tri Pointe Homes Inc. has a healthy liquidity position and is able to meet its short-term obligations comfortably.

Comparing the current cash ratio to previous years, we observe that the ratio has shown variability. The company had its highest cash ratio of 2.24 in 2022 and its lowest ratio of 1.15 in 2019. This demonstrates fluctuations in the company's cash position relative to its current liabilities over the years.

Overall, Tri Pointe Homes Inc.'s cash ratio illustrates a strong liquidity position, with the company holding sufficient cash reserves to cover its short-term obligations. Investors and stakeholders may find this reassuring as it indicates the company's ability to weather unforeseen financial challenges and meet its immediate payment obligations.