Merit Medical Systems Inc (MMSI)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	587,036	58,408	67,750	56,916	44,320
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	203,564	220,645	236,280	185,004	181,656
Cash ratio		2.88	0.26	0.29	0.31	0.24

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($587,036K + $—K) ÷ $203,564K
= 2.88

The cash ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities using only its cash and cash equivalents. In the case of Merit Medical Systems, Inc., the cash ratio has shown significant improvement over the past five years, increasing from 0.33 in 2019 to 3.02 in 2023.

A high cash ratio indicates that the company has a strong ability to meet its short-term obligations with its readily available cash reserves. It suggests that Merit Medical Systems, Inc. has improved its liquidity position and is better equipped to handle unexpected expenses or financial challenges.

The notable increase in the cash ratio over the years reflects positively on the company's cash management practices and financial health. It signals that Merit Medical Systems, Inc. has been able to build up its cash reserves and provide a cushion against potential financial risks.

Overall, the trend of the cash ratio for Merit Medical Systems, Inc. demonstrates a strengthening liquidity position and suggests that the company has been effectively managing its cash resources to meet its short-term obligations.