Weatherford International PLC (WFRD)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 958,000 | 910,000 | 951,000 | 1,118,000 | 618,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 1,866,000 | 1,470,000 | 1,332,000 | 1,362,000 | 1,672,000 |
| Cash ratio | 0.51 | 0.62 | 0.71 | 0.82 | 0.37 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($958,000K
+ $—K)
÷ $1,866,000K
= 0.51
The cash ratio measures a company's ability to cover its short-term liabilities with its readily available cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations using liquid assets.
Weatherford International plc's cash ratio has shown a decreasing trend over the past three years, declining from 0.94 in 2021 to 0.66 in 2023. This downward trend may raise concerns about the company's liquidity position and its ability to meet short-term liabilities with its existing cash resources.
The decreasing cash ratio could be attributed to various factors such as operating cash outflows exceeding cash inflows, investments in non-liquid assets, or increasing short-term liabilities. Investors, creditors, and other stakeholders may closely monitor this trend to assess the company's liquidity risk and financial health.
While a cash ratio of 0.66 in 2023 indicates that Weatherford International plc still has a sufficient level of cash to cover its short-term obligations, management may need to focus on improving liquidity management to ensure the company's financial stability in the future.
Peer comparison
Dec 31, 2023