Roivant Sciences Ltd (ROIV)

Cash ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022
Cash and cash equivalents	US$ in thousands	6,535,710	1,676,810	2,060,400
Short-term investments	US$ in thousands	—	15,302	13,634
Total current liabilities	US$ in thousands	266,758	272,448	184,367
Cash ratio		24.50	6.21	11.25

March 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($6,535,710K + $—K) ÷ $266,758K
= 24.50

The cash ratio of Roivant Sciences Ltd has shown a significant increase over the past three years. As of March 31, 2024, the cash ratio stands at 24.50, which indicates that the company has a strong ability to cover its short-term obligations with its available cash and cash equivalents. This is a substantial improvement compared to the cash ratio of 6.21 as of March 31, 2023, and 11.25 as of March 31, 2022.

The upward trend in the cash ratio suggests that Roivant Sciences Ltd has been effectively managing its liquidity position and increasing its cash reserves relative to its current liabilities. This may indicate prudent financial management and a reduced risk of facing liquidity problems in the short term. However, it is also important for the company to strike a balance between holding excess cash and investing it in opportunities for growth and expansion.