Advanced Micro Devices Inc (AMD)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	3,787,000	3,933,000	4,835,000	2,535,000	1,595,000
Short-term investments	US$ in thousands	1,345,000	1,840,000	1,020,000	1,073,000	695,000
Total current liabilities	US$ in thousands	7,281,000	6,689,000	6,369,000	4,240,000	2,417,000
Cash ratio		0.70	0.86	0.92	0.85	0.95

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($3,787,000K + $1,345,000K) ÷ $7,281,000K
= 0.70

The cash ratio measures a company's ability to meet its short-term liabilities using its cash and cash equivalents. Advanced Micro Devices Inc's cash ratio has fluctuated over the years as follows:

- As of December 31, 2020, the cash ratio was 0.95, indicating that for every dollar of current liabilities, the company had $0.95 in cash and cash equivalents.
- By December 31, 2021, the cash ratio decreased to 0.85, suggesting a slight decline in the company's ability to cover its short-term obligations with its available cash.
- It improved slightly to 0.92 by December 31, 2022, implying a better liquidity position compared to the previous year.
- However, the cash ratio declined to 0.86 by December 31, 2023, indicating a slight deterioration in the company's ability to meet its short-term liabilities with its cash.
- Finally, as of December 31, 2024, the cash ratio decreased to 0.70, which may raise concerns about the company's liquidity position and its ability to handle short-term obligations solely from its cash reserves.

In conclusion, Advanced Micro Devices Inc's cash ratio has shown fluctuations over the years, with some improvement and some decline. It is important for the company to maintain a healthy cash ratio to ensure it can meet its short-term financial obligations effectively.