HealthStream Inc (HSTM)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	40,333	46,023	46,905	36,566	131,538
Short-term investments	US$ in thousands	30,800	7,885	5,041	9,928	41,328
Total current liabilities	US$ in thousands	118,361	117,213	100,350	119,442	105,185
Cash ratio		0.60	0.46	0.52	0.39	1.64

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($40,333K + $30,800K) ÷ $118,361K
= 0.60

The cash ratio of Healthstream Inc has shown fluctuations over the past five years, ranging from 0.57 to 1.85. A higher cash ratio indicates that the company has a greater ability to cover its short-term liabilities using its cash and cash equivalents.

In 2019, the company had a significantly high cash ratio of 1.85, suggesting a strong liquidity position. However, there was a notable decrease in the cash ratio in 2020 to 0.57, indicating a potential liquidity strain.

The cash ratio improved in 2021 to 0.72, although it was still lower than the 2019 level. It further increased in 2022 to 0.61 but remained below the 2019 peak. In 2023, the cash ratio reached 0.78, showing a slight improvement from the previous year.

Overall, the cash ratio of Healthstream Inc has displayed variability over the years, with the company experiencing fluctuations in its ability to cover short-term liabilities with its cash reserves. Ongoing monitoring of the cash ratio is essential to assess the company's liquidity position and its ability to meet immediate financial obligations.