Cognizant Technology Solutions Corp Class A (CTSH)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	2,621,000	2,191,000	1,792,000	2,680,000	2,645,000
Short-term investments	US$ in thousands	14,000	310,000	927,000	44,000	779,000
Total current liabilities	US$ in thousands	3,333,000	3,347,000	3,529,000	3,540,000	2,983,000
Cash ratio		0.79	0.75	0.77	0.77	1.15

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,621,000K + $14,000K) ÷ $3,333,000K
= 0.79

The cash ratio of Cognizant Technology Solutions Corp. has demonstrated stability over the past five years, ranging from 1.04 to 1.46. The cash ratio represents the company's ability to cover its short-term liabilities with its available cash and cash equivalents. A cash ratio greater than 1 indicates that the company has sufficient liquid assets to cover its short-term obligations.

Cognizant's cash ratio has generally been above 1, suggesting a healthy liquidity position and the ability to meet its short-term financial commitments without relying heavily on external financing. The slight fluctuations in the cash ratio from year to year may be attributed to variations in cash holdings and short-term liabilities.

Overall, the consistent range of the cash ratio indicates that Cognizant has maintained a prudent balance between holding an adequate amount of cash to cover obligations and deploying excess cash in other strategic investments or activities.