HealthStream Inc (HSTM)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	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
Receivables	US$ in thousands	38,446	42,710	34,920	46,100	30,376
Total current liabilities	US$ in thousands	118,361	117,213	100,350	119,442	105,185
Quick ratio		0.93	0.82	0.87	0.78	1.93

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($40,333K + $30,800K + $38,446K) ÷ $118,361K
= 0.93

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio above 1 indicates that the company has enough liquid assets to cover its current liabilities.

Healthstream Inc's quick ratio has shown some fluctuations over the past five years. In 2019, the quick ratio was very high at 2.14, indicating a strong ability to meet short-term obligations with liquid assets. However, this ratio decreased significantly to 0.96 in 2020, suggesting a potential liquidity issue.

Subsequently, there was an improvement in the quick ratio, reaching 1.06 in 2021 and further increasing to 0.98 in 2022 before rising again to 1.10 in 2023. These ratios indicate that Healthstream Inc has been able to enhance its liquidity position and strengthen its ability to cover short-term liabilities over the years.

Overall, Healthstream Inc's quick ratio has exhibited some variability but generally remains above 1 in recent years, which is a positive sign for the company's short-term financial health and ability to meet its current obligations.