Ormat Technologies Inc (ORA)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 195,808 | 95,872 | 239,278 | 448,252 | 71,173 |
| Short-term investments | US$ in thousands | — | — | 43,343 | 98,217 | — |
| Total current liabilities | US$ in thousands | 537,012 | 343,910 | 544,156 | 248,647 | 376,476 |
| Cash ratio | 0.36 | 0.28 | 0.52 | 2.20 | 0.19 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($195,808K
+ $—K)
÷ $537,012K
= 0.36
The cash ratio of Ormat Technologies Inc has shown fluctuations over the past five years. In 2023, the cash ratio stood at 0.44, indicating that the company had $0.44 in cash and cash equivalents for every $1 of current liabilities. This ratio has increased from 2022 when it was 0.36 but is lower compared to 2021 when it was 0.59. The significant decrease in the cash ratio from 2021 to 2022 suggests that the company may have had less liquidity to cover its short-term obligations.
The sharp increase in the cash ratio in 2020 to 1.86 indicates a substantial improvement in Ormat Technologies Inc's liquidity position, with the company holding $1.86 in cash and cash equivalents for every $1 of current liabilities. However, this high ratio may also indicate that the company was holding excess cash that could have been invested more productively elsewhere. The cash ratio then dropped in 2019 to 0.22, signifying a lower level of liquidity compared to the other years.
Overall, Ormat Technologies Inc's cash ratio has been volatile over the years, indicating fluctuations in the company's ability to meet its short-term obligations solely with cash and cash equivalents. It is essential for the company to strike a balance between holding sufficient cash for liquidity needs and utilizing excess cash effectively to maximize shareholder value.
Peer comparison
Dec 31, 2023