Roivant Sciences Ltd (ROIV)

Quick ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022
Cash	US$ in thousands	6,535,710	1,676,810	2,060,400
Short-term investments	US$ in thousands	—	15,302	13,634
Receivables	US$ in thousands	53,545	30,379	3,878
Total current liabilities	US$ in thousands	266,758	272,448	184,367
Quick ratio		24.70	6.32	11.27

March 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($6,535,710K + $—K + $53,545K) ÷ $266,758K
= 24.70

The quick ratio of Roivant Sciences Ltd has shown significant fluctuations over the past three years. In the fiscal year ending March 31, 2024, the quick ratio stood at 24.70, reflecting a substantial increase from 6.32 in the previous year and 11.27 in the year before.

A quick ratio above 1 indicates that the company has an adequate level of liquid assets to cover its short-term liabilities. The sharp increase in the quick ratio from 2023 to 2024 suggests that Roivant Sciences Ltd has significantly improved its liquidity position, possibly by increasing its cash reserves or reducing its current liabilities.

However, it is essential to ensure that this high quick ratio is sustainable and not a result of temporary factors. It may be necessary to delve deeper into the company's financial statements to understand the underlying reasons for this significant improvement in liquidity. Additionally, comparing the quick ratio to industry benchmarks and historical data can provide further insights into Roivant Sciences Ltd's financial health and liquidity management.