HealthStream Inc (HSTM)

Cash ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash and cash equivalents	US$ in thousands	40,333	44,123	25,805	48,836	46,023	48,257	37,216	43,370	46,905	55,459	49,792	45,348	36,566	107,007	112,534	107,425	131,538	133,914	120,849	110,610
Short-term investments	US$ in thousands	30,800	27,691	30,158	9,818	7,885	3,587	2,000	2,008	5,041	5,095	5,349	10,622	9,928	42,666	31,989	34,585	41,328	38,724	40,737	36,322
Total current liabilities	US$ in thousands	118,361	114,582	109,151	121,004	117,213	105,390	104,914	114,562	100,350	101,950	105,918	116,906	119,442	95,014	92,442	102,474	105,185	99,699	98,313	110,982
Cash ratio		0.60	0.63	0.51	0.48	0.46	0.49	0.37	0.40	0.52	0.59	0.52	0.48	0.39	1.58	1.56	1.39	1.64	1.73	1.64	1.32

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 reflects Healthstream Inc's ability to cover its current liabilities with cash and cash equivalents. In Q4 2023, the cash ratio of 0.78 indicates that the company had $0.78 in cash and cash equivalents for every $1 of current liabilities, showing a strong liquidity position. Compared to previous quarters, the cash ratio has been consistently above 0.60 since Q1 2022, demonstrating an improving ability to meet short-term obligations using cash resources. This suggests that Healthstream Inc has a prudent level of liquidity to manage its short-term liabilities in the recent quarters. However, it is important to note that a very high cash ratio may also indicate an inefficient use of resources, as excess cash may not be generating returns for the company.