Photronics Inc (PLAB)

Cash ratio

		Jan 28, 2024	Oct 31, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 31, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 31, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020	Oct 31, 2019	Jul 28, 2019	Apr 28, 2019
Cash and cash equivalents	US$ in thousands	508,518	499,292	448,479	367,485	334,792	319,680	380,833	329,282	314,195	276,670	283,249	255,965	278,539	278,665	260,597	237,790	218,309	206,530	197,243	167,066
Short-term investments	US$ in thousands	12,996	12,915	27,325	45,431	39,199	38,820	—	—	—	0	—	—	—	—	—	—	—	—	—	—
Total current liabilities	US$ in thousands	185,289	185,223	190,652	185,168	199,331	193,797	197,114	186,471	191,094	176,148	167,617	159,287	145,531	142,939	175,309	153,372	157,654	151,954	159,274	139,284
Cash ratio		2.81	2.77	2.50	2.23	1.88	1.85	1.93	1.77	1.64	1.57	1.69	1.61	1.91	1.95	1.49	1.55	1.38	1.36	1.24	1.20

January 28, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($508,518K + $12,996K) ÷ $185,289K
= 2.81

The cash ratio of Photronics, Inc. has shown a positive trend over the past few quarters, indicating a strengthening ability to cover its short-term liabilities with its readily available cash and cash equivalents. The cash ratio has steadily increased from 2.05 in Q2 2022 to 2.99 in Q1 2024, reaching its highest level in the latest quarter.

A cash ratio above 1 suggests that the company has sufficient cash to cover its current liabilities. Photronics, Inc.'s cash ratio consistently being well above 1 reflects a healthy liquidity position and a solid financial standing. It indicates that the company is well-equipped to meet its short-term obligations without having to rely extensively on external financing or potentially facing cash flow issues.

The improving trend in the cash ratio indicates efficient cash management by the company, maintaining an optimal balance between liquidity and operational needs. Investors and creditors typically view a high cash ratio positively as it demonstrates a company's ability to weather unexpected financial challenges and take advantage of opportunities for growth.

Overall, the increasing cash ratio of Photronics, Inc. reflects positively on its financial health and indicates a strong capacity to manage its short-term obligations with cash on hand.