IAC Inc. (IAC)

Cash ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash and cash equivalents US$ in thousands 1,297,440 1,417,390 2,118,730 3,366,180
Short-term investments US$ in thousands 148,998 239,373 19,788 224,979
Total current liabilities US$ in thousands 950,490 1,079,990 1,381,500 750,901
Cash ratio 1.52 1.53 1.55 4.78

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,297,440K + $148,998K) ÷ $950,490K
= 1.52

The cash ratio of IAC Inc. has shown a downward trend over the past three years. From a high of 4.78 in 2020, the ratio decreased to 1.55 by the end of 2021 and further declined to 1.53 in 2022 and 1.52 in 2023.

A cash ratio above 1 indicates that the company has sufficient cash and cash equivalents to cover its short-term liabilities. While a declining trend in the cash ratio can be concerning, it is important to consider other factors such as the company's operational efficiency, profitability, and cash flow management practices to gain a comprehensive understanding of its financial health.

Therefore, the decreasing cash ratio of IAC Inc. suggests a potential reduction in its liquidity position over the years, which may warrant further investigation into the company's overall financial performance and management of its cash resources.