Jazz Pharmaceuticals PLC (JAZZ)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	1,506,310	881,482	591,448	1,057,770	637,344
Short-term investments	US$ in thousands	420,000	30,000	—	1,075,000	440,000
Total current liabilities	US$ in thousands	1,536,690	933,193	809,303	653,745	364,490
Cash ratio		1.25	0.98	0.73	3.26	2.96

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,506,310K + $420,000K) ÷ $1,536,690K
= 1.25

The cash ratio of Jazz Pharmaceuticals plc has shown varying trends over the past five years. In 2023, the cash ratio stands at 1.39, indicating that the company has $1.39 in cash and cash equivalents for every $1 of current liabilities. This ratio has slightly increased compared to 2022 (1.33) and 2021 (1.21), suggesting improved liquidity position.

However, there was a significant decrease in the cash ratio in 2020, where it stood at 3.59, and in 2019, where it was 3.28. These high ratios indicate that in those years, Jazz Pharmaceuticals plc had a much higher level of cash and cash equivalents relative to current liabilities, which could imply a stronger ability to meet its short-term obligations.

Overall, the cash ratio of Jazz Pharmaceuticals plc has fluctuated over the years, with the current level in 2023 indicating a relatively healthy liquidity position, albeit slightly lower than the exceptional liquidity seen in the previous two years. It is essential for the company to maintain an adequate level of liquidity to ensure its ability to meet short-term financial commitments.