West Pharmaceutical Services Inc (WST)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 853,900 | 894,300 | 762,600 | 615,500 | 439,100 |
| Short-term investments | US$ in thousands | — | — | — | 214,000 | — |
| Total current liabilities | US$ in thousands | 671,800 | 519,000 | 594,100 | 503,400 | 341,600 |
| Cash ratio | 1.27 | 1.72 | 1.28 | 1.65 | 1.29 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($853,900K
+ $—K)
÷ $671,800K
= 1.27
The cash ratio measures a company's ability to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet its short-term obligations without relying on external sources.
West Pharmaceutical Services, Inc.'s cash ratio has fluctuated over the past five years, ranging from 1.33 to 1.92. In 2022, the cash ratio was at its highest at 1.92, indicating a significant cash position relative to its short-term liabilities. However, in 2020, the ratio decreased to 1.33, suggesting a lower liquidity position compared to the other years.
Overall, the company has maintained a relatively healthy cash ratio above 1, indicating that it has sufficient cash reserves to cover its short-term debt obligations in most of the years analyzed. This suggests a strong liquidity position for West Pharmaceutical Services, Inc., which can be reassuring for investors and creditors.
Peer comparison
Dec 31, 2023