Harmony Biosciences Holdings (HRMY)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	311,660	243,784	234,309	228,631
Short-term investments	US$ in thousands	41,800	79,331	—	—
Total current liabilities	US$ in thousands	163,781	78,884	53,775	134,539
Cash ratio		2.16	4.10	4.36	1.70

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($311,660K + $41,800K) ÷ $163,781K
= 2.16

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. Harmony Biosciences Holdings Inc's cash ratio has shown some volatility over the past four years.

As of December 31, 2023, the company's cash ratio was 2.27, indicating that it had $2.27 in cash and cash equivalents for every $1 of current liabilities. This represents a decrease from the previous year's cash ratio of 4.33. While a cash ratio above 1.0 suggests that the company can cover its short-term obligations with its available cash, a lower ratio like the one observed in 2023 may raise some concerns about liquidity.

In 2022 and 2021, Harmony Biosciences Holdings Inc had more robust cash ratios of 4.33 and 4.56, respectively, indicating strong liquidity positions in those years. However, in 2020, the cash ratio dropped to 1.76, which could have signaled some short-term liquidity challenges for the company.

Overall, the trend in Harmony Biosciences Holdings Inc's cash ratio suggests some fluctuation in the company's ability to cover its short-term obligations with cash over the past four years. Further analysis of the company's cash management practices and cash flow dynamics may be necessary to understand the reasons behind these fluctuations and to assess the company's overall liquidity position.