Penumbra Inc (PEN)

Cash ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cash and cash equivalents US$ in thousands 167,486 69,858 59,379 69,670 72,779
Short-term investments US$ in thousands 121,701 118,172 195,496 195,162 116,610
Total current liabilities US$ in thousands 151,144 144,932 123,197 105,932 91,048
Cash ratio 1.91 1.30 2.07 2.50 2.08

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($167,486K + $121,701K) ÷ $151,144K
= 1.91

The cash ratio of Penumbra Inc has exhibited some fluctuations over the past five years. The ratio was 2.15 in 2023, indicating that the company had $2.15 in cash and cash equivalents for every $1 of current liabilities. This was higher than the ratio in 2022 but lower than those in 2021, 2020, and 2019, which were 1.51, 2.31, 2.68, and 2.24 respectively.

A higher cash ratio generally suggests that a company is in a better position to meet its short-term obligations using its readily available cash resources. Conversely, a lower ratio may indicate potential liquidity challenges. Therefore, Penumbra Inc's cash ratio of 2.15 in 2023 implies that the company had a relatively strong liquidity position that year. However, it is essential to consider other liquidity ratios and factors alongside the cash ratio to gain a more comprehensive understanding of the company's overall liquidity health.