Photronics Inc (PLAB)

Cash ratio

		Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020
Cash and cash equivalents	US$ in thousands	598,485	499,292	319,680	276,670	278,665
Short-term investments	US$ in thousands	42,184	12,915	38,820	0	—
Total current liabilities	US$ in thousands	183,811	185,223	193,797	176,148	142,939
Cash ratio		3.49	2.77	1.85	1.57	1.95

October 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($598,485K + $42,184K) ÷ $183,811K
= 3.49

The cash ratio of Photronics Inc has shown an increasing trend over the past five years, indicating a strengthening liquidity position. As of October 31, 2024, the cash ratio stood at 3.49, signifying that the company had $3.49 in cash and cash equivalents for every dollar of current liabilities. This indicates that Photronics Inc has ample liquid assets to cover its immediate obligations, highlighting a favorable liquidity position.

Comparing this to previous years, the cash ratio has shown consistent improvement from 1.95 in 2020 to 3.49 in 2024. The upward trend suggests that the company has been effectively managing its cash resources and maintaining a healthy liquidity position over the years.

A higher cash ratio is typically seen as a positive indicator of a company's ability to meet its short-term obligations without relying on external sources. Photronics Inc's increasing cash ratio reflects a responsible approach to managing its liquidity and suggests a lower risk of defaulting on its current liabilities.