Woodward Inc (WWD)
Cash ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 282,270 | 137,447 | 107,844 | 446,555 | 149,773 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 923,510 | 617,196 | 539,113 | 366,257 | 392,332 |
| Cash ratio | 0.31 | 0.22 | 0.20 | 1.22 | 0.38 |
September 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($282,270K
+ $—K)
÷ $923,510K
= 0.31
The cash ratio measures a company's ability to cover its short-term obligations using only its cash and cash equivalents. Woodward Inc's cash ratio has fluctuated over the past five years. In 2024, the cash ratio was 0.31, indicating that the company had $0.31 of cash and cash equivalents for every dollar of current liabilities. This represents an improvement compared to the previous year's cash ratio of 0.22 in 2023 and 0.20 in 2022, suggesting a better liquidity position in 2024.
However, when comparing the 2024 ratio to the cash ratio of 1.22 in 2021 and 0.38 in 2020, the company's liquidity position appears weaker in the most recent year. A cash ratio of 0.31 implies that Woodward Inc may have less immediate cash available to meet its short-term obligations in 2024 compared to 2021. It is important for the company to closely monitor its liquidity position to ensure it can meet its financial obligations in a timely manner.