Innoviva Inc (INVA)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	193,513	291,049	201,525	246,487	278,096
Short-term investments	US$ in thousands	10,600	6,400	0	438,258	72,749
Receivables	US$ in thousands	69,621	54,672	110,711	93,931	79,427
Total current liabilities	US$ in thousands	38,134	7,004	5,807	6,110	5,371
Quick ratio		7.18	50.27	53.77	127.44	80.11

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($193,513K + $10,600K + $69,621K) ÷ $38,134K
= 7.18

The quick ratio, also known as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets. A higher quick ratio indicates that a company has more liquid assets relative to its current liabilities, which implies a stronger ability to meet its short-term obligations.

Looking at Innoviva Inc's quick ratio over the past five years, we observe a significant fluctuation in the ratio. In 2023, the quick ratio stands at 7.96, which is substantially higher compared to the previous year's ratio of 2.87. This indicates a significant improvement in the company's liquidity position from 2022 to 2023.

However, the quick ratio in 2023 is lower than the exceptionally high ratios seen in 2021, 2020, and 2019, which were 54.02, 55.98, and 80.29, respectively. These extremely high ratios suggest that during those years, Innoviva Inc had an exceptionally large amount of liquid assets relative to its current liabilities.

Overall, while the quick ratio for 2023 has improved from the previous year, it remains significantly lower than the peak levels seen in prior years. This could indicate a potential shift in the company's liquidity management strategy or changes in its current asset composition. Further analysis of Innoviva Inc's financial statements and operational context would be needed to fully understand the reasons behind these fluctuations in the quick ratio.