Arrowhead Pharmaceuticals Inc (ARWR)

Cash ratio

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cash and cash equivalents	US$ in thousands	99,200	102,991	100,705	184,434	143,583
Short-term investments	US$ in thousands	578,276	292,700	268,391	310,083	256,929
Total current liabilities	US$ in thousands	103,168	105,456	138,850	146,536	40,682
Cash ratio		6.57	3.75	2.66	3.37	9.84

September 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($99,200K + $578,276K) ÷ $103,168K
= 6.57

The cash ratio measures a company's ability to cover its short-term liabilities using only its cash and cash equivalents. Arrowhead Pharmaceuticals Inc's cash ratio has fluctuated over the past five years, ranging from 2.66 to 9.84.

In 2024, the cash ratio stands at 6.57, indicating that the company has $6.57 in cash and cash equivalents for every $1 of current liabilities. This represents an improvement compared to the previous year, where the cash ratio was 3.75.

The significant increase in the cash ratio from 2022 to 2024 suggests that Arrowhead Pharmaceuticals Inc has strengthened its liquidity position, potentially by increasing its cash reserves or reducing its short-term liabilities. A higher cash ratio indicates a better ability to meet short-term obligations without relying on external financing.

Overall, the rising trend in Arrowhead Pharmaceuticals Inc's cash ratio implies improved financial health and liquidity management, which could better position the company to navigate potential challenges and seize future opportunities.