Ormat Technologies Inc (ORA)

Cash ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash and cash equivalents US$ in thousands 205,772 195,808 95,872 239,278 448,252
Short-term investments US$ in thousands -111,377 — 0 43,343 98,217
Total current liabilities US$ in thousands 598,078 537,012 343,910 544,156 248,647
Cash ratio 0.16 0.36 0.28 0.52 2.20

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($205,772K + $-111,377K) ÷ $598,078K
= 0.16

The cash ratio of Ormat Technologies Inc has shown a decreasing trend over the past five years. It was at a healthy level of 2.20 in December 31, 2020, indicating the company had $2.20 in cash for every $1 of its current liabilities. However, the ratio declined significantly to 0.52 by December 31, 2021, which may indicate a decrease in the company's ability to cover its short-term liabilities solely with its cash holdings.

Further deterioration was observed in the following years, with the ratio dropping to 0.28 in December 31, 2022, 0.36 in December 31, 2023, and finally to 0.16 by December 31, 2024. This downward trend suggests that Ormat Technologies Inc may be facing challenges in maintaining sufficient cash reserves relative to its current liabilities. It's important for investors and stakeholders to closely monitor this trend to assess the company's liquidity position and ability to meet its short-term obligations.