Insulet Corporation (PODD)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	704,200	674,200	790,000	907,200	213,700
Short-term investments	US$ in thousands	53,500	50,800	—	40,400	162,400
Total current liabilities	US$ in thousands	451,200	364,700	228,800	207,800	157,700
Cash ratio		1.68	1.99	3.45	4.56	2.38

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($704,200K + $53,500K) ÷ $451,200K
= 1.68

Insulet Corporation's cash ratio has shown a decreasing trend over the past five years, declining from 2.58 in 2019 to 1.82 in 2023. The cash ratio measures a company's ability to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations.

In 2021, Insulet Corporation had a relatively high cash ratio of 3.78, reflecting a robust liquidity position that could comfortably cover its short-term liabilities. However, the ratio decreased significantly in subsequent years, possibly due to changes in the company's cash management or investment strategies.

The declining trend in the cash ratio raises potential concerns about Insulet Corporation's liquidity position and its ability to meet short-term obligations. Investors and analysts may monitor this trend closely to assess the company's financial health and liquidity management.