Valaris Ltd (VAL)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 620,500 | 724,100 | 325,800 | 97,200 | 275,100 |
| Short-term investments | US$ in thousands | — | — | 120,000 | 0 | 329,000 |
| Total current liabilities | US$ in thousands | 744,300 | 504,400 | 426,800 | 830,700 | 528,500 |
| Cash ratio | 0.83 | 1.44 | 1.04 | 0.12 | 1.14 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($620,500K
+ $—K)
÷ $744,300K
= 0.83
The cash ratio of Valaris Ltd has shown a decreasing trend over the past three years. In 2021, the cash ratio was 1.72, indicating that the company had $1.72 in cash and cash equivalents for every $1 of current liabilities. This ratio decreased slightly to 1.73 in 2022 before taking a more significant drop to 1.07 in 2023.
A cash ratio above 1 indicates that the company has sufficient cash to cover its short-term liabilities. While Valaris Ltd's cash ratio is still above 1 in each year, the decreasing trend may signal a potential liquidity concern or a shift in the company's cash management strategy. It is important for investors and analysts to closely monitor this ratio to assess the company's ability to meet its short-term obligations with its available cash resources.
Peer comparison
Dec 31, 2023