Watsco Inc (WSO)
Cash ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 526,271 | 294,354 | 424,854 | 278,864 | 210,112 | 175,022 | 162,526 | 140,955 | 147,505 | 130,228 | 129,049 | 110,607 | 118,268 | 137,201 | 96,787 | 93,875 | 146,067 | 92,600 | 79,573 | 51,236 |
| Short-term investments | US$ in thousands | 255,669 | 255,669 | 200,000 | 200,000 | 0 | — | — | — | — | — | — | — | — | 111,776 | — | 102,518 | 97,847 | 103,355 | — | — |
| Total current liabilities | US$ in thousands | 983,901 | 933,149 | 945,167 | 1,026,130 | 712,012 | 887,628 | 955,999 | 953,083 | 906,522 | 939,522 | 1,061,340 | 836,839 | 726,722 | 796,693 | 815,264 | 630,820 | 499,715 | 609,498 | 638,858 | 520,474 |
| Cash ratio | 0.79 | 0.59 | 0.66 | 0.47 | 0.30 | 0.20 | 0.17 | 0.15 | 0.16 | 0.14 | 0.12 | 0.13 | 0.16 | 0.31 | 0.12 | 0.31 | 0.49 | 0.32 | 0.12 | 0.10 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($526,271K
+ $255,669K)
÷ $983,901K
= 0.79
The cash ratio of Watsco Inc has shown fluctuations over the periods analyzed. The ratio was relatively low, at 0.10 as of March 31, 2020, indicating that the company had 10 cents in cash and cash equivalents for every dollar of current liabilities.
The ratio improved to 0.49 by December 31, 2020, signaling a strengthening liquidity position. However, it decreased to 0.12 by June 30, 2021, before recovering to 0.31 by September 30, 2021.
Subsequently, the cash ratio declined to 0.13 as of March 31, 2022, which could suggest a potential liquidity concern. The ratio remained relatively stable around 0.12-0.17 until reaching 0.79 by December 31, 2024, indicating a significant improvement in the company's ability to cover its short-term obligations with cash.
Overall, Watsco Inc's cash ratio demonstrates variability in its ability to meet its short-term liabilities with available cash reserves, with notable improvements in liquidity observed in certain periods. It is important for investors and stakeholders to monitor these fluctuations to assess the company's financial health and risk management practices.