IPG Photonics Corporation (IPGP)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	620,040	514,674	698,209	709,105	876,231
Short-term investments	US$ in thousands	310,152	662,807	479,374	805,400	514,835
Total current liabilities	US$ in thousands	205,019	214,861	274,646	313,433	214,578
Cash ratio		4.54	5.48	4.29	4.83	6.48

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($620,040K + $310,152K) ÷ $205,019K
= 4.54

The cash ratio of IPG Photonics Corporation has shown some fluctuations over the years. As of December 31, 2020, the company had a cash ratio of 6.48, indicating that it had $6.48 in cash and cash equivalents for every $1 of current liabilities. This ratio decreased to 4.83 by December 31, 2021, suggesting a lower level of liquidity compared to the previous year.

By December 31, 2022, the cash ratio further declined to 4.29, indicating a potential decrease in the company's ability to cover its short-term obligations with its cash reserves alone. However, there was a slight improvement by December 31, 2023, with the cash ratio increasing to 5.48, showing a better position in terms of liquidity.

As of December 31, 2024, the cash ratio decreased again to 4.54. It is essential for stakeholders to monitor this ratio closely as it provides insights into the company's ability to meet its short-term financial obligations with its available cash resources.