FormFactor Inc (FORM)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 177,812 | 109,130 | 151,010 | 187,225 | 144,545 |
| Short-term investments | US$ in thousands | 150,507 | 129,006 | 125,055 | 67,810 | 76,327 |
| Total current liabilities | US$ in thousands | 131,095 | 149,667 | 148,754 | 154,571 | 136,560 |
| Cash ratio | 2.50 | 1.59 | 1.86 | 1.65 | 1.62 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($177,812K
+ $150,507K)
÷ $131,095K
= 2.50
The cash ratio measures the ability of a company to cover its short-term liabilities using only its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations.
Analyzing FormFactor Inc's cash ratio over the past five years, we observe a fluctuating trend. The cash ratio increased from 1.62 in 2019 to 1.65 in 2020, signifying a slight improvement in the company's liquidity position. However, there was a more notable increase in 2021, with the cash ratio rising to 1.86, indicating a more robust ability to cover short-term liabilities with cash on hand.
In 2022, the cash ratio slightly decreased to 1.59, suggesting a slight dip in liquidity compared to the previous year. However, in 2023, there was a significant improvement in the cash ratio to 2.50, indicating a substantial increase in the company's ability to meet short-term obligations solely from its cash reserves.
Overall, FormFactor Inc's cash ratio has displayed some volatility over the past five years, but the upward trend in recent years suggests an enhanced liquidity position and a stronger ability to handle short-term financial commitments.
Peer comparison
Dec 31, 2023