US Physicalrapy Inc (USPH)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 152,825 | 31,594 | 28,567 | 32,918 | 23,548 |
| Short-term investments | US$ in thousands | — | 2,858 | — | — | — |
| Total current liabilities | US$ in thousands | 102,185 | 85,489 | 83,481 | 93,492 | 60,563 |
| Cash ratio | 1.50 | 0.40 | 0.34 | 0.35 | 0.39 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($152,825K
+ $—K)
÷ $102,185K
= 1.50
The cash ratio of U.S. Physical Therapy, Inc. has shown a fluctuating trend over the past five years. The cash ratio was relatively low at 0.48 in 2019, then increased to 0.39 in 2020 and remained at the same level in 2021. However, there was a significant improvement in the cash ratio to 0.50 in 2022 and a notable increase to 1.60 in 2023.
A cash ratio of 1.60 in 2023 indicates that the company had $1.60 in cash and cash equivalents for every dollar of its current liabilities, suggesting a strong liquidity position. This implies that the company had a significant amount of readily available cash to cover its short-term obligations, which can be viewed positively as it may indicate improved financial stability and the ability to meet its short-term financial commitments comfortably.
It is important to note that while a high cash ratio signals strong liquidity, excessively high levels of cash holdings may also indicate inefficient use of resources as cash sitting idle does not generate returns. Therefore, it is essential for the company to strike a balance between maintaining ample cash reserves for emergencies and deploying excess cash effectively to maximize shareholder value.
Peer comparison
Dec 31, 2023