Walgreens Boots Alliance Inc (WBA)
Cash ratio
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 739,000 | 1,358,000 | 559,000 | 469,000 | 1,023,000 |
| Short-term investments | US$ in thousands | 11,000 | 1,114,000 | 634,000 | 47,000 | 5,000 |
| Total current liabilities | US$ in thousands | 24,535,000 | 22,583,000 | 22,054,000 | 27,070,000 | 25,769,000 |
| Cash ratio | 0.03 | 0.11 | 0.05 | 0.02 | 0.04 |
August 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($739,000K
+ $11,000K)
÷ $24,535,000K
= 0.03
The cash ratio, which is a liquidity ratio, measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a better ability to cover short-term liabilities.
Looking at the data provided for Walgreens Boots Alliance Inc, the cash ratio has fluctuated over the past five years.
In 2023, the cash ratio stands at 0.08, indicating that for every dollar of current liabilities, the company has $0.08 of cash and cash equivalents. This represents a significant decline from the previous year's ratio of 0.16.
In 2022, the cash ratio was at its highest point over the five-year period at 0.16, demonstrating an improvement in the company's ability to cover short-term obligations.
In 2021, the cash ratio decreased to 0.09, indicating a slight decline in liquidity compared to the prior year.
In 2020, the cash ratio was 0.06, signifying a lower ability to cover short-term liabilities with cash and cash equivalents.
In 2019, the cash ratio was the same as in 2023, at 0.08, suggesting consistent liquidity compared to the most recent year.
The fluctuation in the cash ratio over the years indicates varying levels of liquidity for Walgreens Boots Alliance Inc. The decline in the cash ratio in 2023 may raise concerns about the company's ability to meet its short-term obligations solely with its cash and cash equivalents. Therefore, it would be essential for stakeholders to closely monitor the company's liquidity position and assess the effectiveness of its cash management strategies to ensure it can meet its short-term obligations.
Peer comparison
Aug 31, 2023