Ironwood Pharmaceuticals Inc (IRWD)

Cash ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash and cash equivalents	US$ in thousands	92,154	110,164	175,321	740,342	656,203	574,188	504,365	593,371	620,129	574,276	492,699	438,469	362,564	307,555	253,252	231,143	177,023	139,231	98,908	119,045
Short-term investments	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total current liabilities	US$ in thousands	276,101	280,579	305,390	23,843	25,525	27,117	23,298	147,403	161,698	145,694	134,370	23,603	32,173	32,901	26,695	27,595	40,929	52,795	110,861	118,569
Cash ratio		0.33	0.39	0.57	31.05	25.71	21.17	21.65	4.03	3.84	3.94	3.67	18.58	11.27	9.35	9.49	8.38	4.33	2.64	0.89	1.00

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($92,154K + $—K) ÷ $276,101K
= 0.33

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to cover obligations.

Ironwood Pharmaceuticals Inc's cash ratio has fluctuated over the past eight quarters, ranging from 0.38 to 31.43. In Q4 2023, the cash ratio declined to 0.38 compared to the previous quarter, indicating a decrease in the company's cash position relative to its current liabilities. This may raise concerns about Ironwood's liquidity in the short term.

In Q1 2023, the cash ratio spiked significantly to 31.43, indicating a temporary anomaly or a unique event affecting the company's cash position in that quarter. It would be important to investigate the reason behind this extreme ratio to understand the company's financial health accurately.

Overall, while fluctuations in the cash ratio are normal for a business, consistent monitoring and analysis of Ironwood Pharmaceuticals Inc's cash position are crucial to assess its ability to meet short-term obligations effectively.