Corcept Therapeutics Incorporated (CORT)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	127,665	135,551	436,619	335,812	476,892
Short-term investments	US$ in thousands	255,669	232,670	365,343	145,918	364,506
Total current liabilities	US$ in thousands	140,773	104,505	81,588	6,908	10,554
Cash ratio		2.72	3.52	9.83	69.74	79.72

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($127,665K + $255,669K) ÷ $140,773K
= 2.72

The cash ratio measures a company's ability to cover its short-term liabilities using its readily available cash and cash equivalents. Looking at Corcept Therapeutics Incorporated's cash ratio over the past five years, we observe a gradual decline.

As of December 31, 2020, the cash ratio stood at a healthy 79.72, indicating the company had $79.72 in cash and cash equivalents for every $1 of current liabilities. However, by December 31, 2021, the ratio decreased to 69.74, still reflecting a strong liquidity position but showing a slight reduction in the ability to cover short-term obligations solely with cash.

The trend takes a sharper turn in the subsequent years with significant drops in the cash ratio. By December 31, 2022, the ratio plunged to 9.83, signaling a substantial decrease in liquidity. This downward trend continues, with the cash ratio falling to 3.52 as of December 31, 2023, and further dropping to 2.72 by December 31, 2024.

The decreasing cash ratio over the years may raise concerns about Corcept Therapeutics' liquidity position and its ability to meet short-term financial obligations using available cash resources alone. It suggests a diminishing ability to cover immediate liabilities solely from cash holdings, which could potentially pose liquidity challenges for the company in the future.