Dropbox Inc (DBX)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	614,900	232,800	533,000	314,900	551,300
Short-term investments	US$ in thousands	741,100	1,110,600	1,185,100	806,400	607,700
Total current liabilities	US$ in thousands	1,201,500	1,196,500	1,175,800	1,087,800	1,014,800
Cash ratio		1.13	1.12	1.46	1.03	1.14

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($614,900K + $741,100K) ÷ $1,201,500K
= 1.13

The cash ratio, which measures a company's ability to cover its short-term obligations with its readily available cash and cash equivalents, for Dropbox Inc has shown some fluctuations over the past five years.

In 2023, the cash ratio stood at 1.21, indicating that for every dollar of current liabilities, Dropbox had $1.21 in cash and cash equivalents. This shows a slight improvement compared to the previous year, where the ratio was 1.20.

Looking back to 2021, Dropbox had a higher cash ratio of 1.53, signaling a stronger liquidity position than in the following years. In contrast, the cash ratio was lower in 2020 at 1.09, suggesting a potential liquidity challenge in that year.

Overall, Dropbox Inc has maintained a relatively healthy cash ratio above 1 in the recent past, indicating that the company has sufficient cash on hand to meet its short-term obligations. However, fluctuations in the cash ratio over time highlight the importance of closely monitoring and managing liquidity to ensure the financial health and stability of the company.