Monolithic Power Systems Inc (MPWR)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	527,843	288,607	189,265	334,944	172,960
Short-term investments	US$ in thousands	580,633	449,266	535,817	260,169	282,437
Total current liabilities	US$ in thousands	235,035	263,400	226,944	146,969	98,225
Cash ratio		4.72	2.80	3.19	4.05	4.64

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($527,843K + $580,633K) ÷ $235,035K
= 4.72

The cash ratio of Monolithic Power System Inc has shown fluctuations over the past five years. The cash ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger liquidity position.

In 2023, the cash ratio increased to 5.34, indicating that the company had significant cash reserves to cover its short-term obligations. This could be a positive sign of financial health and stability.

In 2022, the cash ratio decreased to 2.93, which may suggest a lower ability to meet short-term liabilities solely with cash on hand compared to the previous year.

In 2021, the cash ratio increased to 3.33, showing an improvement in liquidity compared to the previous year. This could indicate better management of cash resources to meet short-term obligations.

In 2020, the cash ratio was 4.19, reflecting a relatively strong liquidity position compared to the preceding years. This indicates the company had ample cash to cover its short-term liabilities at that time.

In 2019, the cash ratio was 4.81, indicating a robust liquidity position with a high level of cash available to meet short-term obligations.

Overall, the fluctuation in the cash ratio over the years may be influenced by various factors such as changes in cash reserves, operating cash flows, or management strategies for maintaining liquidity. Investors and stakeholders may monitor this ratio to assess the company's ability to meet short-term obligations effectively.