Fulgent Genetics Inc (FLGT)

Cash ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cash and cash equivalents US$ in thousands 97,473 79,506 164,894 87,426 11,965
Short-term investments US$ in thousands 326,681 773,377 770,652 211,941 16,304
Total current liabilities US$ in thousands 73,018 88,107 105,310 130,115 3,723
Cash ratio 5.81 9.68 8.88 2.30 7.59

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($97,473K + $326,681K) ÷ $73,018K
= 5.81

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of funds.

Fulgent Genetics Inc's cash ratio has fluctuated over the past five years, ranging from a low of 2.34 in 2020 to a high of 7.99 in 2019. The company's cash ratio improved significantly in 2023 compared to the previous years, reaching 6.25, which indicates a strong liquidity position.

The trend of increasing cash ratios from 2020 to 2023 suggests that Fulgent Genetics Inc has been effectively managing its liquidity and increasing its cash reserves. This could be attributed to better cash management practices, improved operating efficiency, or increased profitability.

Overall, the company's cash ratio of 6.25 in 2023 reflects a healthy liquidity position, indicating that Fulgent Genetics Inc is well-positioned to meet its short-term obligations using its available cash and cash equivalents.