Incyte Corporation (INCY)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	3,213,380	2,951,420	2,057,440	1,513,010	1,832,680
Short-term investments	US$ in thousands	442,667	287,543	290,752	288,369	284,870
Receivables	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	1,240,380	1,157,080	854,308	631,195	513,340
Quick ratio		2.95	2.80	2.75	2.85	4.13

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($3,213,380K + $442,667K + $—K) ÷ $1,240,380K
= 2.95

The quick ratio, also known as the acid-test ratio, provides insight into a company's short-term liquidity and ability to meet its immediate obligations using its most liquid assets. A higher quick ratio indicates that a company has a stronger ability to cover its short-term liabilities without having to sell inventory.

Analyzing Incyte Corp.'s quick ratio over the past five years, we observe that the ratio has fluctuated within a relatively narrow range. The quick ratio has ranged from a low of 3.50 in 2022 to a high of 4.81 in 2019, with the latest reported ratio for 2023 standing at 3.69.

The consistent level of the quick ratio above 1.0 across all years indicates that Incyte Corp. is able to meet its short-term obligations using its quick assets (current assets excluding inventory) comfortably. The decreasing trend from 2019 to 2022, followed by a slight uptick in 2023, suggests a potential decrease in immediate liquidity in recent years, although the quick ratio remains at a healthy level overall.

In conclusion, the historical trend of Incyte Corp.'s quick ratio shows a stable and healthy liquidity position, with the company maintaining a comfortable buffer to cover its short-term liabilities using its readily available assets. This analysis indicates that Incyte Corp. has been managing its short-term liquidity effectively in recent years.