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.