ExlService Holdings Inc (EXLS)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	136,953	118,669	135,337	218,530	119,165
Short-term investments	US$ in thousands	153,881	179,027	179,430	184,286	202,238
Total current liabilities	US$ in thousands	326,403	277,946	495,686	221,078	229,349
Cash ratio		0.89	1.07	0.64	1.82	1.40

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($136,953K + $153,881K) ÷ $326,403K
= 0.89

The cash ratio of ExlService Holdings Inc has fluctuated over the past five years, ranging from 0.73 to 2.00. The ratio indicates the company's ability to cover its short-term obligations solely with its cash and cash equivalents. A higher cash ratio suggests a stronger ability to meet short-term liabilities without relying on other current assets or external financing.

Analyzing the trend, the cash ratio decreased from 2.00 in 2020 to 0.73 in 2021, indicating a potential liquidity issue or a decrease in the level of cash reserves relative to short-term obligations. However, the ratio recovered in 2022 and 2023, reaching 1.20 and 1.07 respectively.

Overall, while the recent cash ratios are below the peak of 2.00 in 2020, they suggest that ExlService Holdings Inc maintains a sufficient level of cash to cover its short-term obligations, albeit with some fluctuations in liquidity over the years. Further analysis of the company's cash management practices and overall financial health would provide a more comprehensive understanding of its liquidity position.