Diodes Incorporated (DIOD)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	315,457	336,732	363,599	268,065	258,390
Short-term investments	US$ in thousands	10,174	7,059	6,542	6,142	4,825
Total current liabilities	US$ in thousands	393,498	432,530	471,034	509,762	285,322
Cash ratio		0.83	0.79	0.79	0.54	0.92

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($315,457K + $10,174K) ÷ $393,498K
= 0.83

The cash ratio of Diodes, Inc. has fluctuated over the past five years, ranging from 0.68 to 1.10. The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of financing.

In 2023, the cash ratio improved to 1.07 from 0.99 in 2022, suggesting that Diodes, Inc. had higher levels of cash and cash equivalents relative to its short-term liabilities. This could indicate improved liquidity and financial stability for the company.

Comparing the cash ratio to previous years, it is evident that Diodes, Inc. has managed its liquidity effectively, with the ratio generally above 1.00, except for 2020 when it dropped to 0.68. The significant increase in the cash ratio from 2020 to 2021 and the subsequent fluctuations in the following years may indicate changes in the company's cash management practices or overall financial health.

Overall, the upward trend in the cash ratio over the past couple of years suggests that Diodes, Inc. has been successful in maintaining a healthy level of cash reserves relative to its short-term obligations, which can enhance its ability to weather financial uncertainties and invest in growth opportunities.