ICU Medical Inc (ICUI)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	254,222	208,784	552,827	396,097	268,670
Short-term investments	US$ in thousands	501	4,224	14,420	14,687	23,967
Total current liabilities	US$ in thousands	481,838	494,559	200,777	195,488	248,468
Cash ratio		0.53	0.43	2.83	2.10	1.18

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($254,222K + $501K) ÷ $481,838K
= 0.53

The cash ratio of ICU Medical, Inc. has fluctuated over the past five years. The company's cash ratio was 0.72 as of December 31, 2023, indicating that for every dollar of current liabilities, the company had $0.72 in cash and cash equivalents on hand. This ratio has increased compared to the previous year, where it was 0.63. However, the current cash ratio is lower than the levels in 2021 and 2020, where it stood at 3.14 and 2.45 respectively. In 2019, the cash ratio was 1.36.

The downward trend in the cash ratio from 2021 to 2023 implies a reduction in the company's ability to cover its short-term obligations with its available cash and cash equivalents. Investors and creditors typically view a higher cash ratio favorably as it indicates a company's liquidity and ability to meet its immediate financial obligations. Conversely, a declining trend in the cash ratio may raise concerns about the company's short-term financial health and ability to manage liquidity effectively.