HealthStream Inc (HSTM)

Cash ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash and cash equivalents US$ in thousands 59,469 40,333 46,023 46,905 36,566
Short-term investments US$ in thousands 37,748 30,800 7,885 5,041 9,928
Total current liabilities US$ in thousands 115,693 118,361 117,213 100,350 119,442
Cash ratio 0.84 0.60 0.46 0.52 0.39

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($59,469K + $37,748K) ÷ $115,693K
= 0.84

HealthStream Inc's cash ratio has shown an increasing trend over the past five years, reaching 0.84 as of December 31, 2024, indicating the company holds a higher level of cash and cash equivalents relative to its current liabilities. This suggests that the company has improved its ability to cover its short-term obligations with its available cash reserves. However, it is important to note that a very high cash ratio may also indicate an inefficient use of cash resources, as excess cash may be better utilized elsewhere for growth or investment purposes. Overall, HealthStream Inc's increasing cash ratio demonstrates a strengthening liquidity position, enhancing its ability to meet its short-term financial obligations.