Enphase Energy Inc (ENPH)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	288,748	473,244	119,316	679,379	251,409
Short-term investments	US$ in thousands	1,406,290	1,139,600	897,335	0	—
Total current liabilities	US$ in thousands	532,449	638,219	439,796	534,043	199,311
Cash ratio		3.18	2.53	2.31	1.27	1.26

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($288,748K + $1,406,290K) ÷ $532,449K
= 3.18

The cash ratio of Enphase Energy Inc has shown a consistent upward trend over the last five years, indicating a strengthened liquidity position. As of December 31, 2023, the cash ratio stands at 3.35, which means that the company holds $3.35 in cash and cash equivalents for every dollar of current liabilities. This demonstrates a significant improvement from the cash ratios of 2.62 in 2022, 2.40 in 2021, 1.33 in 2020, and 1.39 in 2019.

The increasing trend in the cash ratio signifies that Enphase Energy Inc has been able to enhance its ability to meet its short-term obligations using its readily available cash resources. A higher cash ratio generally indicates a company's strong financial health and ability to weather potential financial challenges or unexpected expenses in the short term without relying heavily on external financing.

Overall, the consistent growth in the cash ratio reflects Enphase Energy Inc's effective management of its cash resources and suggests a strengthened liquidity position that bodes well for the company's financial stability and operational flexibility moving forward.