Alpha and Omega Semiconductor Ltd (AOSL)

Cash ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Cash and cash equivalents	US$ in thousands	175,127	195,188	314,352	202,412	158,536
Short-term investments	US$ in thousands	—	—	100	—	—
Total current liabilities	US$ in thousands	154,233	172,561	267,722	233,230	192,058
Cash ratio		1.14	1.13	1.17	0.87	0.83

June 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($175,127K + $—K) ÷ $154,233K
= 1.14

The cash ratio of Alpha and Omega Semiconductor Ltd has shown a generally positive trend over the past five years. The company's cash ratio has improved from 0.83 in June 2020 to 1.14 in June 2024, indicating an increasing ability to cover its short-term liabilities with cash on hand.

A cash ratio of 1.14 as of June 30, 2024, suggests that Alpha and Omega Semiconductor Ltd had $1.14 in cash and cash equivalents for every dollar of current liabilities. This indicates that the company has a sufficient level of liquid assets to meet its short-term obligations.

The consistent improvement in the cash ratio over the years reflects a strengthening liquidity position for the company. A higher cash ratio is generally favorable as it signifies a company's ability to weather potential financial challenges and meet its immediate financial obligations without relying on external sources of funding.

Overall, the increasing trend in Alpha and Omega Semiconductor Ltd's cash ratio demonstrates a healthy liquidity position, which is crucial for the company's financial stability and operational flexibility.