Nextracker Inc. Class A Common Stock (NXT)

Cash ratio

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022
Cash and cash equivalents	US$ in thousands	474,054	367,818	372,918	355,081	130,008	100,081
Short-term investments	US$ in thousands	—	—	98,000	—	29,300	—
Total current liabilities	US$ in thousands	891,486	759,437	772,210	676,138	507,426	604,612
Cash ratio		0.53	0.48	0.61	0.53	0.31	0.17

March 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($474,054K + $—K) ÷ $891,486K
= 0.53

The cash ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates that the company is more capable of meeting its short-term obligations.

Analyzing the cash ratio of Nextracker Inc. Class A Common Stock over the last six quarters provides valuable insights into the company's liquidity position. The trend in the cash ratio shows fluctuations during the period:

- In March 2024, the cash ratio improved to 0.53, indicating that Nextracker Inc. had sufficient cash to cover 53% of its short-term liabilities.
- In December 2023, the cash ratio was 0.48, which was slightly lower compared to the previous quarter but still within an acceptable range.
- In September 2023, the cash ratio increased significantly to 0.61, signaling a strong ability to meet short-term obligations from available cash.
- In June 2023, the cash ratio remained stable at 0.53, indicating consistent liquidity management.
- In March 2023, there was a notable increase in the cash ratio to 0.31, suggesting an improvement in the company's liquidity position.
- In December 2022, the cash ratio was at its lowest point at 0.17, indicating a lower ability to cover short-term liabilities with cash.

Overall, the cash ratio of Nextracker Inc. has shown variability but generally indicates a reasonable level of liquidity management. However, it is essential for the company to maintain or increase its cash reserves to ensure sufficient liquidity to meet its short-term financial obligations effectively.