Etsy Inc (ETSY)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	914,323	921,278	780,196	1,244,100	443,293
Short-term investments	US$ in thousands	236,118	250,413	204,416	425,119	373,959
Total current liabilities	US$ in thousands	710,781	631,755	615,588	454,664	188,528
Cash ratio		1.62	1.85	1.60	3.67	4.33

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($914,323K + $236,118K) ÷ $710,781K
= 1.62

The cash ratio for Etsy Inc has shown a decreasing trend over the past five years, indicating a decline in the company's ability to cover its short-term liabilities solely with cash and cash equivalents. The ratio was relatively high in the years 2019 and 2020, at 4.80 and 4.12 respectively, suggesting a strong liquidity position during those periods. However, the ratio has decreased in the subsequent years, reaching 2.17 in 2023.

While a high cash ratio generally indicates a strong ability to meet short-term obligations, a decreasing trend may raise concerns about the company's liquidity management and its ability to quickly access funds when needed. Further analysis of the company's overall liquidity position, including its current assets and liabilities, would provide a more comprehensive understanding of its financial health.