Envestnet Inc (ENV)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total current assets	US$ in thousands	263,808	311,291	567,276	505,199	182,503
Total current liabilities	US$ in thousands	292,534	327,064	288,723	236,369	203,790
Current ratio		0.90	0.95	1.96	2.14	0.90

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $263,808K ÷ $292,534K
= 0.90

The current ratio of Envestnet Inc. has exhibited fluctuations over the past five years, ranging from a low of 0.90 in 2019 and 2023 to a high of 2.14 in 2020. The ratio measures the company's ability to meet its short-term obligations with its current assets. A current ratio below 1 suggests that the company may have difficulty meeting its short-term liabilities with its current assets alone, which could indicate potential liquidity issues.

Envestnet's current ratio of 0.90 in 2023 and 2019 indicates that its current liabilities exceeded its current assets in those years, raising concerns about its short-term liquidity position. However, the ratio improved in 2022 to 0.93, although it still remains below the ideal ratio of 1. A current ratio above 1 is typically considered healthy as it indicates that the company has more current assets than current liabilities to cover its short-term obligations.

The significant drop in the current ratio from 2020 to 2021, where it decreased from 2.14 to 1.96, suggests a potential shift in the composition of Envestnet's current assets and liabilities during that period. This could be influenced by changes in working capital management, such as inventory levels, accounts receivable, and accounts payable.

Overall, Envestnet's current ratio analysis indicates fluctuations in the company's short-term liquidity position over the years, emphasizing the importance of monitoring changes in current assets and liabilities to ensure the company's ability to meet its short-term financial obligations.