Cognex Corporation (CGNX)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	186,094	202,655	181,374	186,161	269,073
Short-term investments	US$ in thousands	59,956	129,392	218,759	137,455	103,240
Total current liabilities	US$ in thousands	169,380	151,884	187,708	188,589	132,297
Cash ratio		1.45	2.19	2.13	1.72	2.81

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($186,094K + $59,956K) ÷ $169,380K
= 1.45

The cash ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. For Cognex Corporation, the cash ratio decreased from 2.81 in December 2020 to 1.72 in December 2021, indicating a decline in the company's ability to cover its short-term liabilities solely with its cash holdings. However, there was a slight recovery as the ratio increased to 2.13 in December 2022, followed by a further improvement to 2.19 in December 2023.

The decrease to 1.45 in December 2024 suggests that Cognex Corporation may have experienced a reduction in its cash holdings relative to its short-term liabilities. It is important for stakeholders to monitor changes in the cash ratio over time to assess the company's liquidity position and its ability to meet its immediate financial obligations using its available cash resources.