Perdoceo Education Corp (PRDO)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	118,009	109,408	319,982	105,684	108,687
Short-term investments	US$ in thousands	485,135	399,315	174,213	300,676	185,488
Total current liabilities	US$ in thousands	111,039	163,381	140,244	103,815	103,813
Cash ratio		5.43	3.11	3.52	3.91	2.83

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($118,009K + $485,135K) ÷ $111,039K
= 5.43

The cash ratio measures a company's ability to cover its short-term liabilities using its cash and cash equivalents. Perdoceo Education Corporation's cash ratio has been consistently improving over the past five years, indicating a stronger liquidity position.

Starting at 2.92 in 2019, the cash ratio increased to 4.00 in 2020, further rose to 3.59 in 2021, then to 3.17 in 2022, and reached its highest level at 5.54 in 2023. This upward trend suggests that the company has been effectively managing its cash resources relative to its short-term obligations.

A cash ratio above 1 indicates the company can cover its current liabilities with cash on hand. Perdoceo Education Corporation's ratios for the past five years have consistently been well above 1, indicating a healthy liquidity position. The significant increase in the cash ratio from 2019 to 2023 reflects the company's improved ability to meet its short-term financial obligations using its cash reserves.