Trex Company Inc (TREX)
Current ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 318,908 | 172,254 | 286,842 | 401,054 | 321,997 |
| Total current liabilities | US$ in thousands | 342,477 | 91,062 | 290,599 | 88,702 | 106,353 |
| Current ratio | 0.93 | 1.89 | 0.99 | 4.52 | 3.03 |
December 31, 2024 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $318,908K ÷ $342,477K
= 0.93
Based on the provided data, Trex Company Inc's current ratio has fluctuated over the years:
- As of December 31, 2020, the company had a current ratio of 3.03, indicating that it had $3.03 in current assets for every $1 in current liabilities, portraying a strong liquidity position.
- By December 31, 2021, the current ratio improved significantly to 4.52, demonstrating a further enhancement in the company's ability to meet short-term obligations with its current assets.
- However, there was a notable decline in the current ratio by December 31, 2022, dropping to 0.99, suggesting potential challenges in fulfilling immediate payment obligations with existing current assets.
- The current ratio recovered by December 31, 2023, reaching a level of 1.89, indicating an improvement in liquidity compared to the previous year but still below the ratios seen in 2020 and 2021.
- By December 31, 2024, the current ratio decreased to 0.93, showing a decline in the company's ability to cover short-term liabilities with its current assets, potentially raising concerns about liquidity management.
In summary, the trend in Trex Company Inc's current ratio reflects fluctuations in its liquidity position over the years, with periods of strength followed by challenges. It is crucial for the company to carefully manage its current assets and liabilities to ensure adequate liquidity to meet its short-term obligations effectively.
Peer comparison
Dec 31, 2024