Ufp Industries Inc (UFPI)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,118,330 | 559,397 | 286,662 | 436,507 | 168,336 |
| Short-term investments | US$ in thousands | 34,745 | 36,013 | 36,495 | 24,308 | 18,527 |
| Total current liabilities | US$ in thousands | 567,976 | 611,835 | 776,042 | 463,749 | 354,042 |
| Cash ratio | 2.03 | 0.97 | 0.42 | 0.99 | 0.53 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,118,330K
+ $34,745K)
÷ $567,976K
= 2.03
The cash ratio of Ufp Industries Inc has shown an increasing trend over the past five years, reflecting the company's improved ability to cover its short-term obligations with cash and cash equivalents. The ratio has progressively strengthened from 0.53 in 2019 to 2.03 in 2023. This indicates that the company's cash and cash equivalents have more than doubled its current liabilities in 2023.
A cash ratio above 1 signifies that the company holds more cash and cash equivalents than its current liabilities, indicating a strong liquidity position. Ufp Industries Inc's cash ratio has consistently been above 1 since 2020, indicating its ability to meet its short-term obligations with readily available cash resources.
The significant increase in the cash ratio from 2022 to 2023 suggests that the company has substantially bolstered its cash position relative to its current liabilities, further solidifying its liquidity position. This trend bodes well for Ufp Industries Inc's ability to navigate any short-term financial challenges and indicates prudent financial management in terms of maintaining an adequate cash buffer.