Certara Inc (CERT)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Cash and cash equivalents	US$ in thousands	234,951	236,586	185,797
Short-term investments	US$ in thousands	—	4,638	57
Total current liabilities	US$ in thousands	130,023	103,158	92,225
Cash ratio		1.81	2.34	2.02

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($234,951K + $—K) ÷ $130,023K
= 1.81

The cash ratio of Certara Inc has shown a decreasing trend from 3.76 in 2020 to 1.94 in 2023. This ratio indicates the company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio is generally considered favorable as it suggests that the company has more liquid assets to meet its immediate obligations.

The gradual decline in Certara's cash ratio over the past four years may indicate a potential decrease in the company's liquidity position or a shift in its cash management strategy. It is essential for investors and stakeholders to closely monitor this trend to ensure that the company maintains a sufficient level of cash to handle its short-term financial commitments.