DexCom Inc (DXCM)
Quick ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Cash | 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 |
Receivables | US$ in thousands | — | — | — | — | — |
Total current liabilities | US$ in thousands | 2,932,000 | 1,556,000 | 1,839,300 | 720,800 | 614,100 |
Quick ratio | 0.88 | 1.75 | 1.34 | 3.79 | 4.41 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($606,100K
+ $1,973,300K
+ $—K)
÷ $2,932,000K
= 0.88
The quick ratio, also known as the acid-test ratio, measures a company's ability to cover its short-term obligations with its most liquid assets. DexCom Inc's quick ratio has shown a declining trend over the years, from 4.41 on December 31, 2020, to 0.88 on December 31, 2024.
A higher quick ratio is generally preferred as it indicates that a company has an adequate level of liquid assets to cover its current liabilities. However, a quick ratio that is too high may also suggest that the company is not efficiently utilizing its assets.
DexCom Inc's quick ratio of 0.88 as of December 31, 2024, may raise concerns about its short-term liquidity position, as it indicates that the company may have limited ability to meet its immediate obligations using its quick assets alone. It would be important to further investigate the reasons behind this decrease and assess the overall liquidity risk facing the company.
Peer comparison
Dec 31, 2024