Avantor Inc (AVTR)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	262,900	372,900	301,700	286,600	186,700
Short-term investments	US$ in thousands	16,600	26,200	—	—	—
Total current liabilities	US$ in thousands	1,480,300	1,658,800	1,450,800	1,242,700	1,074,500
Cash ratio		0.19	0.24	0.21	0.23	0.17

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($262,900K + $16,600K) ÷ $1,480,300K
= 0.19

The cash ratio of Avantor Inc has fluctuated over the past five years, ranging from 0.17 to 0.24. The ratio measures the company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio indicates a better ability to meet short-term obligations without relying on external sources of funding.

In 2023, the cash ratio decreased to 0.19 from 0.24 in 2022, which suggests a slight decline in the company's liquidity position. However, it is important to note that the ratio is still within a reasonable range.

Comparing the company's cash ratio to previous years, it seems that the liquidity position has been relatively stable, with minor fluctuations. It is crucial for investors and creditors to monitor this ratio to assess Avantor Inc's ability to handle short-term financial obligations using its cash resources.