Enphase Energy Inc (ENPH)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total current assets	US$ in thousands	2,443,520	2,264,270	1,462,460	933,064	499,657
Total current liabilities	US$ in thousands	532,449	638,219	439,796	534,043	199,311
Current ratio		4.59	3.55	3.33	1.75	2.51

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $2,443,520K ÷ $532,449K
= 4.59

Enphase Energy Inc's current ratio has shown a positive trend over the past five years, indicating an improvement in the company's short-term liquidity position. As of December 31, 2023, the current ratio stood at 4.59, reflecting a substantial increase from 3.55 in 2022 and 3.33 in 2021. This indicates that the company's current assets are more than four times its current liabilities, suggesting a strong ability to meet its short-term obligations.

The significant improvement in the current ratio since 2020, when it was 1.75, highlights Enphase Energy Inc's enhanced liquidity position and better management of current assets and liabilities. The current ratio exceeding 1 indicates that the company's current assets are more than sufficient to cover its current liabilities, reducing the risk of financial distress due to short-term obligations.

However, it is important to note that a very high current ratio may also indicate that the company is not efficiently utilizing its current assets to generate revenue. Therefore, while Enphase Energy Inc's current ratio has shown a positive trajectory, it is crucial for investors and analysts to consider other financial metrics and factors to assess the overall financial health and efficiency of the company.