NVIDIA Corporation (NVDA)

Cash ratio

		Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Jan 26, 2020
Cash and cash equivalents	US$ in thousands	7,280,000	3,389,000	1,990,000	847,000	10,896,000
Short-term investments	US$ in thousands	18,704,000	9,907,000	19,218,000	10,714,000	1,000
Total current liabilities	US$ in thousands	10,631,000	6,563,000	4,335,000	3,925,000	1,784,000
Cash ratio		2.44	2.03	4.89	2.95	6.11

January 28, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($7,280,000K + $18,704,000K) ÷ $10,631,000K
= 2.44

The cash ratio for NVIDIA Corp has fluctuated over the past five years. As of January 28, 2024, the cash ratio stands at 2.73, which indicates that for every dollar of current liabilities, the company has $2.73 in cash or near-cash assets available. This suggests that NVIDIA has relatively strong liquidity levels, allowing it to meet its short-term obligations comfortably.

Comparing this to the previous years, we can observe a downward trend from the peak of 6.20 in January 26, 2020. Despite the decrease in the cash ratio from 2020 to 2024, NVIDIA Corp still maintains a healthy level of liquidity.

It is important to note that while a higher cash ratio implies greater liquidity and ability to cover short-term liabilities, excessively high levels could indicate that the company is not efficiently utilizing its cash resources to generate returns. Conversely, a very low cash ratio may signal potential difficulties in meeting short-term obligations. Overall, a cash ratio of 2.73 for NVIDIA Corp as of January 28, 2024, suggests a comfortable liquidity position.