Axon Enterprise Inc. (AXON)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	598,545	353,684	356,332	155,440	172,250
Short-term investments	US$ in thousands	644,054	581,769	14,510	406,525	178,534
Total current liabilities	US$ in thousands	799,969	602,646	418,521	256,331	195,566
Cash ratio		1.55	1.55	0.89	2.19	1.79

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($598,545K + $644,054K) ÷ $799,969K
= 1.55

The cash ratio measures a company's ability to cover its short-term liabilities using only its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external financing.

Looking at Axon Enterprise Inc's cash ratio over the past five years, we can see that it has fluctuated. The ratio was 2.14 in 2023, slightly higher than the previous year's ratio of 2.07. This indicates that the company had $2.14 in cash and cash equivalents for every $1 of current liabilities at the end of 2023, suggesting a stable liquidity position.

Comparing this to previous years, we can see that the cash ratio was lowest in 2021 at 1.62, indicating a temporary dip in liquidity that year. However, the ratio rebounded in 2022 and 2023, surpassing the levels seen in 2020 and 2019.

Overall, Axon Enterprise Inc's cash ratio has generally been healthy over the past five years, indicating the company's ability to meet its short-term obligations comfortably using its cash reserves. A consistent or increasing trend in the cash ratio is typically viewed positively by investors and creditors as it suggests a strong liquidity position and financial health.