Gilead Sciences Inc (GILD)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	6,085,000	5,412,000	5,338,000	5,997,000	11,631,000
Short-term investments	US$ in thousands	1,179,000	973,000	1,182,000	1,411,000	12,721,000
Total current liabilities	US$ in thousands	11,280,000	11,237,000	11,610,000	11,397,000	9,759,000
Cash ratio		0.64	0.57	0.56	0.65	2.50

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($6,085,000K + $1,179,000K) ÷ $11,280,000K
= 0.64

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. The cash ratio of Gilead Sciences, Inc. has shown fluctuations over the past five years.

In 2019, the cash ratio was exceptionally high at 2.64, indicating a strong ability to cover short-term liabilities with cash on hand. However, this ratio dropped significantly in the subsequent years, reaching its lowest point in 2022 at 0.73. This suggests a potential liquidity concern as the company may have had difficulties meeting its short-term obligations with available cash during that period.

Although there was a slight improvement in 2023 with the cash ratio increasing to 0.85, it still remains relatively lower compared to the 2019 level. Gilead Sciences, Inc. may need to closely monitor its cash management practices to ensure it maintains an adequate level of liquidity to cover its short-term liabilities effectively.