First Solar Inc (FSLR)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	1,946,990	1,481,270	1,450,650	1,227,000	1,352,740
Short-term investments	US$ in thousands	155,495	1,096,710	375,389	520,066	811,506
Total current liabilities	US$ in thousands	1,306,160	1,038,050	726,878	847,398	1,318,210
Cash ratio		1.61	2.48	2.51	2.06	1.64

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,946,990K + $155,495K) ÷ $1,306,160K
= 1.61

The cash ratio measures a company's ability to cover its short-term liabilities with its readily available cash and cash equivalents. For First Solar Inc, the cash ratio has shown fluctuating trends over the past five years. In 2023, the cash ratio stands at 1.85, representing a decrease from the previous year. Despite the decrease, the company still has $1.85 in cash and cash equivalents for every dollar of current liabilities.

Comparing this to the trend over the past five years, the company had relatively higher cash ratios in 2022 (2.71) and 2021 (2.85), indicating a stronger ability to cover short-term obligations with cash on hand during those years. The cash ratio dipped in 2020 to 2.35, but then slightly increased in 2019 to 1.80.

Overall, while the cash ratio for First Solar Inc in 2023 has decreased compared to the previous year, the company still maintains a reasonable level of liquidity to meet its short-term obligations. However, management may want to monitor this ratio closely to ensure an adequate level of liquidity for potential future needs.