Diodes Incorporated (DIOD)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	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
Receivables	US$ in thousands	371,930	369,233	358,496	320,061	260,322
Total current liabilities	US$ in thousands	393,498	432,530	471,034	509,762	285,322
Quick ratio		1.77	1.65	1.55	1.17	1.83

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($315,457K + $10,174K + $371,930K) ÷ $393,498K
= 1.77

The quick ratio of Diodes, Inc. has shown a fluctuating trend over the past five years. In 2023, the quick ratio improved to 2.02 from 1.84 in 2022, indicating that the company's ability to meet its short-term obligations with its most liquid assets increased. This could suggest improved liquidity and a stronger financial position as of December 31, 2023.

Comparing to the ratios in 2021 and 2020, the quick ratio has been steadily increasing over the years, reflecting a positive trend in the company's liquidity management. The quick ratio of 1.77 in 2021 and 1.30 in 2020 was lower than in the subsequent years, indicating a potential liquidity concern and a lower ability to cover short-term liabilities with liquid assets.

In 2019, the quick ratio was relatively high at 2.01, indicating a strong ability to cover short-term obligations with liquid assets. It is important to note that while a higher quick ratio generally suggests stronger liquidity, an excessively high ratio could signify that the company is not efficiently utilizing its assets to promote growth or generate returns.

Overall, the increasing trend in Diodes, Inc.'s quick ratio from 2020 to 2023 indicates an improving liquidity position, which could enhance the company's ability to meet its short-term financial obligations effectively. It is essential for stakeholders to assess this ratio in conjunction with other financial metrics to gain a comprehensive understanding of the company's overall financial health and efficiency in managing its short-term liquidity.