Rambus Inc (RMBS)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	99,774	94,767	125,338	107,891	128,967
Short-term investments	US$ in thousands	382,023	331,077	187,892	377,718	373,682
Receivables	US$ in thousands	147,883	133,797	181,066	179,673	166,716
Total current liabilities	US$ in thousands	81,812	89,121	126,709	267,267	85,864
Quick ratio		7.70	6.28	3.90	2.49	7.80

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($99,774K + $382,023K + $147,883K) ÷ $81,812K
= 7.70

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term liabilities with its most liquid assets. It is calculated by dividing quick assets (current assets excluding inventory) by current liabilities.

Looking at Rambus Inc's quick ratio over the past five years, we observe fluctuations in its liquidity position. In December 2020, the quick ratio was notably high at 7.80, indicating a strong ability to cover short-term obligations without relying on inventory. However, in the subsequent years, the quick ratio decreased to 2.49 in December 2021, increased to 3.90 in December 2022, further improved to 6.28 in December 2023, and peaked at 7.70 in December 2024.

The significant decrease in the quick ratio in 2021 could imply a potential decrease in quick assets or an increase in current liabilities, posing a liquidity concern. However, the subsequent years show an improvement in the quick ratio, indicating better liquidity management by the company. The ratios of 2023 and 2024 suggest that Rambus Inc has significantly enhanced its ability to cover short-term obligations with its liquid assets.

Overall, while the quick ratio of Rambus Inc experienced fluctuations over the past five years, the most recent data points to a strengthened liquidity position, showcasing the company's ability to meet short-term liabilities efficiently.