Roivant Sciences Ltd (ROIV)

Current ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022
Total current assets	US$ in thousands	6,731,830	1,798,590	2,146,520
Total current liabilities	US$ in thousands	266,758	272,448	184,367
Current ratio		25.24	6.60	11.64

March 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $6,731,830K ÷ $266,758K
= 25.24

The current ratio of Roivant Sciences Ltd has shown a significant increase over the past three years, indicating an improvement in the company's short-term liquidity position. As of March 31, 2024, the current ratio stands at 25.24, which is significantly higher compared to 6.60 in 2023 and 11.64 in 2022.

A current ratio of 25.24 implies that the company's current assets are 25.24 times its current liabilities, showcasing a strong ability to cover its short-term obligations. This drastic improvement over the years suggests that Roivant Sciences Ltd has been effective in managing its current assets in relation to its current liabilities, possibly through efficient working capital management or increased cash reserves.

A high current ratio generally indicates a healthy liquidity position, which is essential for meeting short-term financial obligations and operating efficiently. However, an excessively high current ratio may also indicate inefficient use of resources or an excessive build-up of current assets, which may not be optimally utilized.

Overall, the steadily increasing current ratio of Roivant Sciences Ltd reflects positively on its short-term financial health and suggests that the company is well-positioned to meet its current liabilities and operate smoothly in the near future.