IPG Photonics Corporation (IPGP)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	514,674	698,209	709,105	876,231	680,070
Short-term investments	US$ in thousands	662,807	479,374	805,400	514,835	502,546
Total current liabilities	US$ in thousands	214,861	274,646	313,433	214,578	191,904
Cash ratio		5.48	4.29	4.83	6.48	6.16

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($514,674K + $662,807K) ÷ $214,861K
= 5.48

The cash ratio of IPG Photonics Corp has fluctuated over the past five years. The ratio indicates the company's ability to cover its short-term liabilities with its cash and cash equivalents.

In 2023, the cash ratio increased to 5.78 from 4.61 in 2022, showing an improvement in the company's liquidity position. It suggests that IPG Photonics Corp has a higher level of cash reserves relative to its current liabilities, enhancing its ability to meet its short-term obligations.

Comparing to the previous years, 2020 had the highest cash ratio of 7.07, indicating a peak in liquidity levels. The downward trend in the subsequent years until 2023 may suggest a reduction in the proportion of cash and cash equivalents relative to current liabilities over this period.

Overall, although there have been fluctuations in the cash ratio of IPG Photonics Corp, the company has maintained a relatively healthy liquidity position, with the ability to cover a significant portion of its short-term obligations with cash and cash equivalents.