Vulcan Materials Company (VMC)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	931,100	161,400	235,000	1,197,100	271,589
Short-term investments	US$ in thousands	—	—	—	34,301	—
Total current liabilities	US$ in thousands	797,600	956,600	769,300	1,047,900	535,563
Cash ratio		1.17	0.17	0.31	1.18	0.51

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($931,100K + $—K) ÷ $797,600K
= 1.17

The cash ratio of Vulcan Materials Co has shown significant fluctuations over the past five years. In 2023, the cash ratio stands at a relatively healthy 1.26, indicating that the company has $1.26 in cash or near-cash assets for every $1 of current liabilities. This level suggests that the company has a strong ability to cover its short-term obligations using its liquid assets.

In the previous year, 2022, the cash ratio was notably lower at 0.29, signaling a potential liquidity risk as the company had only $0.29 in cash or near-cash assets for every $1 of current liabilities. This sharp decrease from the prior year could have raised concerns about Vulcan Materials Co's ability to meet its short-term financial obligations.

In 2021, the cash ratio improved to 0.43, although it still remained relatively low compared to 2023. This indicates some progress in liquidity management but the company may still have some vulnerability in meeting its short-term liabilities.

The cash ratio was relatively high in 2020 at 1.21, indicating a strong liquidity position that year. The company had $1.21 in cash or near-cash assets for every $1 of current liabilities, suggesting a robust ability to cover its short-term obligations.

In 2019, the cash ratio was 0.65, showing a moderate level of liquidity compared to the other years. The company had $0.65 in cash or near-cash assets for every $1 of current liabilities, indicating a reasonable ability to meet short-term financial obligations.

Overall, the cash ratio trend for Vulcan Materials Co indicates some volatility in liquidity management over the years, with 2023 showing a relatively strong liquidity position, while 2022 being the most concerning year in terms of liquidity. This analysis suggests that monitoring and managing the company's liquidity levels is crucial for its financial health and stability.