Doximity Inc (DOCS)

Cash ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022
Cash and cash equivalents	US$ in thousands	96,785	158,027	112,809
Short-term investments	US$ in thousands	666,115	651,220	595,253
Total current liabilities	US$ in thousands	147,250	139,507	111,282
Cash ratio		5.18	5.80	6.36

March 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($96,785K + $666,115K) ÷ $147,250K
= 5.18

The cash ratio of Doximity Inc has shown a declining trend over the past three years, decreasing from 6.36 as of March 31, 2022, to 5.80 as of March 31, 2023, and further dropping to 5.18 as of March 31, 2024. The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents alone, indicating its liquidity position. A higher cash ratio suggests greater liquidity and a stronger ability to meet short-term obligations without relying on external sources of funding. Although the cash ratio has decreased over the years, Doximity Inc still maintains a healthy level of liquidity as its cash ratio remains above 1, indicating that it can cover its short-term liabilities using its cash reserves. However, management should continue to monitor this trend to ensure the company maintains sufficient liquidity for operational needs and unexpected expenses.