Perrigo Company PLC (PRGO)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	751,300	600,700	1,864,900	631,500	354,300
Short-term investments	US$ in thousands	100	100	400	10,000	6,600
Total current liabilities	US$ in thousands	1,586,300	1,113,600	1,587,900	1,382,000	1,335,800
Cash ratio		0.47	0.54	1.17	0.46	0.27

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($751,300K + $100K) ÷ $1,586,300K
= 0.47

The cash ratio of Perrigo Company plc has shown fluctuations over the past five years, ranging from 0.41 to 1.37. The ratio indicates the company's ability to cover its short-term liabilities with its cash and cash equivalents. In 2021, the ratio peaked at 1.37, suggesting a strong liquidity position, which could be attributed to higher cash reserves relative to current liabilities. However, in 2019, the cash ratio was the lowest at 0.41, indicating a lower ability to cover short-term obligations with available cash. The declining trend observed in 2020 and 2023, where the ratio dropped to 0.64 and 0.60, respectively, may raise concerns about liquidity management. Overall, a cash ratio above 1 is considered favorable as it indicates that the company can fully cover its short-term liabilities with cash on hand. Monitoring this ratio over time can provide insights into Perrigo Company plc's liquidity position and its ability to meet its financial obligations.