Masimo Corporation (MASI)

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	163,000	124,400	150,700	174,100	202,900	219,500	218,000	720,000	745,300	652,300	576,000	551,992	641,400	669,056	631,881	605,916	567,687	513,360	408,784	412,861
Short-term investments	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	0	50,000	50,000	50,000	120,000	120,000	180,000	180,000
Total current liabilities	US$ in thousands	563,800	578,800	571,900	583,200	630,000	587,300	552,000	254,311	267,700	228,254	220,029	196,872	233,836	232,752	227,556	157,292	172,219	150,008	136,074	121,157
Cash ratio		0.29	0.21	0.26	0.30	0.32	0.37	0.39	2.83	2.78	2.86	2.62	2.80	2.74	3.09	3.00	4.17	3.99	4.22	4.33	4.89

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($163,000K + $—K) ÷ $563,800K
= 0.29

The cash ratio for Masimo Corporation has fluctuated over the past few quarters, indicating variations in the company's ability to cover its short-term liabilities with cash and cash equivalents. The cash ratio was relatively stable and healthy, with values above 2.0, for the periods from Dec 31, 2020, to Jun 30, 2022. This suggests that the company had a strong ability to meet its short-term obligations using its cash reserves during this time.

However, there was a significant drop in the cash ratio to 0.39 on Sep 30, 2022, followed by a further decrease to 0.32 on Dec 31, 2022, signaling a potential strain on the company's liquidity position during these periods. This sharp decline may raise concerns about Masimo's short-term financial health and its ability to cover immediate liabilities with cash on hand.

Subsequently, the cash ratio improved to 0.39 on Mar 31, 2023, and continued to increase to 0.30 on Jun 30, 2023, and 0.26 on Sep 30, 2023, indicating a recovery in the company's liquidity position. However, the ratio remains below the levels observed in the earlier stable period, indicating that Masimo may still be working to strengthen its cash reserves and liquidity position.

Overall, while Masimo Corporation experienced fluctuations in its cash ratio, it is essential for the company to carefully manage its liquidity to ensure it can meet its short-term obligations and maintain financial stability in the face of changing market conditions.