Valaris Ltd (VAL)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 368,200 | 620,500 | 724,100 | 608,700 | 325,800 |
| Short-term investments | US$ in thousands | — | — | 0 | — | 120,000 |
| Total current liabilities | US$ in thousands | 679,500 | 744,300 | 504,400 | 422,000 | 426,800 |
| Cash ratio | 0.54 | 0.83 | 1.44 | 1.44 | 1.04 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($368,200K
+ $—K)
÷ $679,500K
= 0.54
The cash ratio of Valaris Ltd has fluctuated over the years based on the provided data. As of December 31, 2020, the cash ratio was at a healthy level of 1.04, indicating that the company had sufficient cash reserves to cover its current liabilities.
By December 31, 2021, and also by December 31, 2022, the cash ratio improved to 1.44, suggesting an increase in the company's ability to meet its short-term obligations with its cash on hand. This indicates a strengthening liquidity position for Valaris during these years.
However, by December 31, 2023, the cash ratio decreased to 0.83, signaling a potential liquidity challenge as the ratio fell below 1. This could imply that Valaris might be facing difficulties in covering its short-term liabilities solely with its cash holdings during this period.
By December 31, 2024, the cash ratio further declined to 0.54, reinforcing the concern about Valaris' ability to meet its short-term obligations with available cash. This significant drop in the ratio could indicate potential cash flow issues or increased short-term liabilities compared to the cash reserves held by the company.
Overall, the trend in Valaris Ltd's cash ratio highlights the importance of closely monitoring liquidity levels and managing cash flow effectively to ensure the company's ability to meet its short-term commitments.
Peer comparison
Dec 31, 2024