ADEIA CORP (ADEA)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	78,825	54,560	114,555	80,428	170,188
Short-term investments	US$ in thousands	35,889	34,790	4,107	72,906	90,796
Total current liabilities	US$ in thousands	73,106	102,038	166,712	189,747	224,671
Cash ratio		1.57	0.88	0.71	0.81	1.16

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($78,825K + $35,889K) ÷ $73,106K
= 1.57

The cash ratio of ADEIA CORP has exhibited some fluctuations over the years based on the provided data. The ratio indicates the company's ability to cover its short-term liabilities solely with its cash and cash equivalents.

As of December 31, 2020, the cash ratio stood at 1.16, which implies that the company had more than enough cash to cover its short-term obligations at that time. However, by December 31, 2021, the ratio decreased to 0.81, suggesting a slight decline in the company's liquidity position.

Subsequently, on December 31, 2022, the cash ratio decreased further to 0.71, indicating a potential strain on the company's ability to meet its short-term liabilities only with available cash. It is worth noting that a ratio below 1 may signal potential liquidity issues.

Fortunately, by December 31, 2023, the cash ratio improved to 0.88, showing a slight recovery in the company's liquidity position. This improvement suggests that the company may have managed its cash position more effectively to meet its short-term obligations.

Lastly, as of December 31, 2024, the cash ratio significantly increased to 1.57, indicating a notable improvement in the company's liquidity position. This higher ratio suggests that ADEIA CORP has a sufficient amount of cash on hand to cover its short-term liabilities comfortably.

In conclusion, the fluctuations in ADEIA CORP's cash ratio over the years reflect varying levels of liquidity and the company's ability to meet its short-term obligations with its available cash and cash equivalents.