Akamai Technologies Inc (AKAM)

Cash ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash and cash equivalents	US$ in thousands	489,468	459,907	298,612	298,800	542,337	457,816	426,710	377,811	536,725	1,264,590	581,068	456,799	352,917	742,521	572,288	384,103	393,745	738,462	515,896	688,698
Short-term investments	US$ in thousands	746,985	954,678	983,573	905,903	1,125,290	406,332	263,979	129,058	1,082,040	1,304,620	1,670,510	1,662,080	1,489,450	701,515	800,321	865,168	2,286,260	831,749	526,596	429,932
Total current liabilities	US$ in thousands	836,038	810,491	860,774	836,253	818,868	753,011	817,084	869,265	790,341	731,440	647,449	715,131	758,170	717,124	657,422	630,247	693,336	602,523	590,814	569,706
Cash ratio		1.48	1.75	1.49	1.44	2.04	1.15	0.85	0.58	2.05	3.51	3.48	2.96	2.43	2.01	2.09	1.98	3.87	2.61	1.76	1.96

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($489,468K + $746,985K) ÷ $836,038K
= 1.48

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 short-term obligations without relying on external funding sources.

Analyzing Akamai Technologies Inc's cash ratio over the past eight quarters, we observe fluctuations in the ratio. In Q4 2023, the cash ratio stood at 1.29, indicating that Akamai had $1.29 in cash and cash equivalents for every dollar of its current liabilities. This ratio was slightly lower than in the previous quarter but remained above 1, suggesting the company had a sufficient cash buffer to meet its short-term obligations comfortably.

Looking back at the trend, we notice that the cash ratio has generally been above 1 over the past eight quarters, indicating a consistent ability to cover short-term liabilities with cash on hand. The highest ratio of 1.58 was recorded in Q4 2022, showcasing a robust liquidity position at that time.

It's worth noting that in Q1 2022, the cash ratio dipped to 0.86, which was the lowest point in the provided data. This could be an area of concern as it implies a lower ability to cover short-term liabilities with available cash at that specific point in time.

Overall, monitoring Akamai's cash ratio trend can provide insights into the company's liquidity position and its ability to weather short-term financial challenges. A stable or improving cash ratio suggests healthy liquidity management, while a declining ratio may prompt further investigation into the company's liquidity risk.