Addus HomeCare Corporation (ADUS)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	64,791	79,961	168,895	145,078	111,714
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	145,117	131,146	117,689	143,901	87,528
Cash ratio		0.45	0.61	1.44	1.01	1.28

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($64,791K + $—K) ÷ $145,117K
= 0.45

The cash ratio measures the ability of a company to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to pay off current liabilities using liquid assets.

For Addus HomeCare Corporation, the cash ratio has fluctuated over the past five years. In 2023, the cash ratio decreased to 0.58 from 0.74 in 2022, signaling a slight decrease in the company's ability to cover its short-term liabilities with its available cash. However, it is important to note that the cash ratio is still above 1, indicating that Addus HomeCare Corporation has sufficient cash reserves to meet its short-term obligations.

Comparing the current cash ratio to previous years, we see a notable decrease from the high of 1.51 in 2021. This decline may suggest that the company has either increased its short-term liabilities or experienced a reduction in its cash holdings relative to its liabilities. Further analysis of the company's cash flow management and liquidity position would be warranted to fully understand the factors driving the changes in the cash ratio over time.