Lam Research Corp (LRCX)

Cash ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Cash and cash equivalents	US$ in thousands	5,847,860	5,337,060	3,522,000	4,418,260	4,915,170
Short-term investments	US$ in thousands	—	37,641	135,731	1,310,870	1,795,080
Total current liabilities	US$ in thousands	4,338,440	4,184,920	4,564,760	3,527,870	3,162,440
Cash ratio		1.35	1.28	0.80	1.62	2.12

June 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($5,847,860K + $—K) ÷ $4,338,440K
= 1.35

The cash ratio is a liquidity ratio that measures a company's ability to cover its short-term obligations with its cash and cash equivalents. A higher cash ratio indicates a company has more readily available cash to meet its current liabilities.

Based on the data provided for Lam Research Corp, the cash ratio has fluctuated over the past five years. In Jun 2020, the company had a high cash ratio of 2.12, indicating a strong ability to cover its short-term obligations with cash. However, this ratio decreased in the following years, reaching a low point of 0.80 in Jun 2022, suggesting a potential liquidity strain.

In the most recent period, Jun 2024, the cash ratio improved to 1.35, showing a better ability to meet short-term obligations with available cash. Overall, the trend indicates some variability in the company's liquidity position over the years, with a recent improvement in the cash ratio. Further analysis of the company's cash management practices and overall financial health would be beneficial to fully assess its liquidity position.