DexCom Inc (DXCM)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	606,100	566,300	642,300	1,052,600	817,600
Short-term investments	US$ in thousands	1,973,300	2,157,800	1,813,900	1,678,600	1,890,100
Total current liabilities	US$ in thousands	2,932,000	1,556,000	1,839,300	720,800	614,100
Cash ratio		0.88	1.75	1.34	3.79	4.41

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($606,100K + $1,973,300K) ÷ $2,932,000K
= 0.88

The cash ratio of DexCom Inc has shown some fluctuations over the years. As of December 31, 2020, the company had a relatively strong cash ratio of 4.41, indicating that it had sufficient cash or cash equivalents to cover its current liabilities. However, by December 31, 2021, the cash ratio decreased to 3.79, which still suggests a healthy liquidity position but a slight decline compared to the previous year.

Subsequently, there was a significant drop in the cash ratio to 1.34 by December 31, 2022. This sharp decrease could signal potential liquidity challenges or a decrease in cash reserves relative to current liabilities. However, there was a slight improvement in the cash ratio to 1.75 by December 31, 2023, which may indicate some efforts to strengthen liquidity.

By December 31, 2024, the cash ratio further declined to 0.88, which raises concerns about the company's ability to meet its short-term obligations solely with available cash or cash equivalents. Overall, DexCom Inc's cash ratio trend suggests a need for careful monitoring of liquidity management to ensure it can effectively cover its current liabilities in the future.