NXP Semiconductors NV (NXPI)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	3,292,000	3,862,000	3,845,000	2,830,000	2,275,000
Short-term investments	US$ in thousands	0	409,000	0	—	—
Total current liabilities	US$ in thousands	3,098,000	4,111,000	3,270,000	2,452,000	2,017,000
Cash ratio		1.06	1.04	1.18	1.15	1.13

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($3,292,000K + $0K) ÷ $3,098,000K
= 1.06

The cash ratio of NXP Semiconductors NV has shown a generally positive trend over the years, starting at 1.13 in December 2020 and gradually increasing to 1.18 by December 2022. This indicates that the company had an increasing ability to cover its short-term liabilities with its available cash and cash equivalents during this period.

However, there was a slight dip in the cash ratio to 1.04 by December 2023, which could signify a temporary decrease in the company's liquidity position or an increase in short-term liabilities. It is worth monitoring whether this decrease is a one-time occurrence or part of a developing trend.

Subsequently, the cash ratio slightly improved to 1.06 by December 2024, which is still slightly lower than the peak in 2022. This suggests that NXP Semiconductors NV maintained a relatively strong liquidity position, although it may not have fully recovered to its previous levels.

Overall, the cash ratio indicates that NXP Semiconductors NV has maintained a prudent level of cash reserves relative to its short-term obligations during the period under review. Further analysis of the company's cash management policies and liquidity needs would provide deeper insights into its financial health.