FormFactor Inc (FORM)
Cash ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Cash and cash equivalents | US$ in thousands | 190,728 | 177,812 | 106,126 | 151,010 | 187,225 |
Short-term investments | US$ in thousands | 169,295 | 150,507 | 132,005 | 125,055 | 67,810 |
Total current liabilities | US$ in thousands | 131,345 | 131,095 | 149,667 | 148,754 | 154,571 |
Cash ratio | 2.74 | 2.50 | 1.59 | 1.86 | 1.65 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($190,728K
+ $169,295K)
÷ $131,345K
= 2.74
The cash ratio of FormFactor Inc has shown a consistent increase over the years, indicating a strengthening liquidity position. From 1.65 in December 2020, the ratio improved to 1.86 by December 2021, suggesting the company had $1.86 in cash and cash equivalents for every $1 of current liabilities. Although there was a slight decline in the ratio to 1.59 by December 2022, it rebounded significantly to 2.50 by December 2023 and further to 2.74 by December 2024.
This upward trend in the cash ratio signifies that FormFactor Inc has been effectively managing its liquidity by holding more cash reserves relative to its short-term obligations. A higher cash ratio is generally seen as a positive indication of a company's ability to meet its immediate financial obligations and withstand unexpected financial challenges. The company's increasing cash ratio over the years suggests a strengthening financial position and improved ability to handle potential cash flow needs.
Peer comparison
Dec 31, 2024