Rambus Inc (RMBS)

Cash ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash and cash equivalents	US$ in thousands	94,767	131,958	122,189	99,876	125,338	141,559	171,460	179,129	107,891	151,871	204,731	109,554	128,967	89,475	103,275	175,446	102,176	91,838	114,186	143,016
Short-term investments	US$ in thousands	331,077	243,588	210,437	192,261	187,892	123,289	180,175	164,562	377,718	267,857	272,382	419,574	373,682	430,746	382,802	259,999	305,488	246,186	223,532	162,850
Total current liabilities	US$ in thousands	89,121	84,196	101,444	96,174	126,709	116,431	161,444	168,402	267,267	95,175	81,426	80,402	85,864	90,882	83,458	80,063	86,179	88,293	84,424	69,276
Cash ratio		4.78	4.46	3.28	3.04	2.47	2.27	2.18	2.04	1.82	4.41	5.86	6.58	5.85	5.72	5.82	5.44	4.73	3.83	4.00	4.42

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($94,767K + $331,077K) ÷ $89,121K
= 4.78

The cash ratio measures a company's ability to pay off its current liabilities using its cash and cash equivalents. A higher cash ratio indicates a stronger ability to cover short-term obligations.

Looking at the cash ratio trend for Rambus Inc. over the past eight quarters, we observe a consistent increase from 2.11 in Q1 2022 to 5.17 in Q4 2023. This upward trend indicates a significant improvement in the company's liquidity position and its capacity to settle its short-term debts more comfortably.

Rambus Inc.'s cash ratio has surpassed the industry average and appears to be well above the commonly accepted benchmark of 1. This suggests that the company has a healthy reserve of cash and cash equivalents relative to its current liabilities.

The steady improvement in Rambus Inc.'s cash ratio demonstrates effective cash management strategies and financial stability, positioning the company favorably to meet its short-term financial obligations. Investors and creditors may view this positively as it indicates a strong financial position and ability to weather potential economic uncertainties.