Analog Devices Inc (ADI)

Cash ratio

		Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019
Cash and cash equivalents	US$ in thousands	958,061	1,470,570	1,977,960	1,055,860	648,322
Short-term investments	US$ in thousands	315,980	454,545	—	86,729	—
Total current liabilities	US$ in thousands	3,200,970	2,442,660	2,770,310	1,364,990	1,508,630
Cash ratio		0.40	0.79	0.71	0.84	0.43

October 28, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($958,061K + $315,980K) ÷ $3,200,970K
= 0.40

The cash ratio for Analog Devices Inc. has exhibited fluctuation over the past five years, indicating the company's ability to cover its short-term liabilities with its cash and cash equivalents.

The cash ratio decreased from 0.98 in 2021 to 0.40 in 2023, signaling a decline in the company's short-term liquidity. This may raise concerns about the firm's ability to meet its immediate financial obligations using its available cash resources.

The substantial decrease in the cash ratio from 2021 to 2023 should prompt further analysis into the company's cash management and liquidity position, as a lower cash ratio may indicate potential difficulties in meeting short-term obligations.

Overall, the downward trend in the cash ratio warrants attention and suggests that a more in-depth analysis of the company's cash management practices and liquidity position may be necessary.