Gen Digital Inc. (GEN)

Cash ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Cash and cash equivalents	US$ in thousands	846,000	750,000	1,887,000	933,000	2,177,000
Short-term investments	US$ in thousands	—	0	4,000	18,000	86,000
Total current liabilities	US$ in thousands	2,648,000	2,849,000	3,065,000	2,136,000	2,622,000
Cash ratio		0.32	0.26	0.62	0.45	0.86

March 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($846,000K + $—K) ÷ $2,648,000K
= 0.32

The cash ratio of Gen Digital Inc. has exhibited fluctuations over the past five years. The ratio stood at 0.32 as of March 31, 2024, which indicates that for every dollar of current liabilities, the company has $0.32 in cash or cash equivalents available to cover immediate obligations.

Comparing this with the previous years, we observe a downward trend from 0.86 in 2020 to 0.32 in 2024. This may suggest a potential liquidity concern as the ability of the company to meet its short-term obligations solely from its cash reserves has decreased over the years.

While a higher cash ratio is generally preferred as it implies a stronger ability to cover short-term liabilities, the decreasing trend in Gen Digital Inc.'s cash ratio warrants a closer examination of its liquidity management strategies and potential cash flow challenges that may be impacting the company's financial health. Further analysis of additional liquidity ratios and the company's operating cash flows would provide a more comprehensive assessment of its overall liquidity position.