CarGurus (CARG)

Cash ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash and cash equivalents	US$ in thousands	291,363	355,330	363,060	456,696	469,517	404,429	338,238	315,005	231,944	231,091	184,642	140,668	190,299	245,941	133,199	74,451	59,920	29,514	27,842	29,939
Short-term investments	US$ in thousands	20,724	91,824	90,490	—	—	—	30,000	60,000	90,000	90,000	85,000	100,000	100,000	—	43,000	81,281	111,692	134,808	119,327	108,500
Total current liabilities	US$ in thousands	115,178	108,638	110,764	123,999	98,733	148,881	175,973	148,907	170,709	102,450	103,547	81,725	66,536	55,867	43,147	58,331	73,758	72,378	70,392	65,474
Cash ratio		2.71	4.12	4.09	3.68	4.76	2.72	2.09	2.52	1.89	3.13	2.60	2.94	4.36	4.40	4.08	2.67	2.33	2.27	2.09	2.11

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($291,363K + $20,724K) ÷ $115,178K
= 2.71

The cash ratio is used to assess a company's ability to cover its short-term liabilities with its available cash and cash equivalents. CarGurus Inc's cash ratio has fluctuated over the past eight quarters, ranging from 2.28 to 5.06.

In general, a higher cash ratio indicates a stronger ability to cover short-term liabilities. CarGurus Inc's cash ratio has been consistently above 1, which suggests that the company has sufficient cash on hand to meet its short-term obligations.

The trend in CarGurus Inc's cash ratio demonstrates some volatility, with peaks and troughs evident over the quarters. The recent increasing trend from Q4 2022 to Q3 2023 indicates a positive improvement in the company's liquidity position. However, the significant fluctuations in the cash ratio should be monitored closely to ensure the company is managing its cash effectively and maintaining a healthy liquidity position. Further analysis in conjunction with other liquidity ratios would provide a more comprehensive assessment of CarGurus Inc's overall financial health.