Altair Engineering Inc (ALTR)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	561,898	467,459	316,146	413,743	241,221
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	487,769	324,110	232,738	473,978	200,754
Cash ratio		1.15	1.44	1.36	0.87	1.20

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($561,898K + $—K) ÷ $487,769K
= 1.15

The cash ratio is used to measure a company's ability to cover its short-term obligations with its cash and cash equivalents. For Altair Engineering Inc, the cash ratio has fluctuated over the years as follows:

- As of December 31, 2020, the cash ratio was 1.20, indicating that Altair had $1.20 in cash and cash equivalents for every dollar of current liabilities.
- By December 31, 2021, the cash ratio decreased to 0.87, implying a lower ability to cover short-term obligations with available cash.
- Subsequently, the cash ratio improved to 1.36 by December 31, 2022, suggesting a stronger liquidity position compared to the previous year.
- The cash ratio continued to increase to 1.44 by December 31, 2023, indicating further improvement in Altair's ability to meet short-term obligations with cash on hand.
- However, by December 31, 2024, the cash ratio decreased slightly to 1.15, still demonstrating a healthy liquidity position but lower than the ratio in the previous year.

Overall, Altair Engineering Inc's cash ratio has shown some volatility but generally indicates a reasonable ability to cover short-term liabilities with its cash and cash equivalents throughout the analyzed period. It is important for the company to maintain a balance between liquidity and investments in order to sustain its operations effectively.