Cadence Design Systems Inc (CDNS)

Cash ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cash and cash equivalents	US$ in thousands	2,644,030	2,786,040	1,058,960	1,012,420	1,008,150	961,982	873,925	916,963	882,325	1,026,050	1,029,540	1,134,750	1,088,940	1,013,820	847,160	742,981	928,432	1,306,560	1,189,190	946,285
Short-term investments	US$ in thousands	140,625	104,700	169,728	144,599	130,359	—	—	—	4,490	—	—	—	5,956	—	—	—	4,452	—	—	—
Total current liabilities	US$ in thousands	1,370,100	1,674,990	1,533,720	1,465,740	1,590,870	1,264,170	1,196,300	1,181,380	1,347,700	1,256,990	1,042,490	960,826	971,225	907,196	926,716	792,341	796,808	1,117,890	1,151,890	1,012,430
Cash ratio		2.03	1.73	0.80	0.79	0.72	0.76	0.73	0.78	0.66	0.82	0.99	1.18	1.13	1.12	0.91	0.94	1.17	1.17	1.03	0.93

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,644,030K + $140,625K) ÷ $1,370,100K
= 2.03

The cash ratio of Cadence Design Systems Inc measures the company's ability to cover its short-term obligations with cash and cash equivalents. A higher cash ratio indicates a stronger liquidity position and ability to meet its immediate financial obligations.

From March 31, 2020 to June 30, 2022, the cash ratio fluctuated within a range of 0.91 to 1.18, indicating varying levels of liquidity. During this period, the company's cash reserves were generally able to cover its short-term liabilities, though there were slight dips in the ratio at certain points.

Notably, in December 31, 2024, the cash ratio significantly increased to 2.03, indicating a substantial improvement in the company's liquidity position. This suggests that Cadence Design Systems Inc had significantly increased its cash reserves relative to its short-term obligations, which may be a positive sign for the company's financial health and ability to manage potential financial risks in the near future.

However, it is also important to note that the cash ratio experienced some fluctuations in the subsequent periods, dropping to 0.66 by December 31, 2022 before gradually increasing again by December 31, 2024. These fluctuations could be due to various factors such as changes in cash management practices, business operations, or investment decisions made by the company.

Overall, the cash ratio trend of Cadence Design Systems Inc reflects its ability to manage liquidity efficiently, with fluctuations in the ratio indicating changes in the company's cash position relative to its short-term liabilities over time.