SolarEdge Technologies Inc (SEDG)

Cash ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cash and cash equivalents	US$ in thousands	274,611	303,904	259,498	214,229	338,468	551,122	557,744	727,849	783,112	678,329	745,534	1,002,770	530,089	526,588	524,112	685,157	827,146	1,048,110	428,372	324,072
Short-term investments	US$ in thousands	311,279	374,869	430,333	466,407	521,570	477,275	493,176	410,820	241,117	202,598	150,259	158,557	167,728	145,459	145,686	139,079	143,687	110,585	113,032	95,143
Total current liabilities	US$ in thousands	1,041,080	903,812	566,824	658,890	893,231	876,651	897,729	900,042	889,717	694,480	612,174	568,741	525,181	405,507	399,585	397,726	436,099	382,537	405,065	389,681
Cash ratio		0.56	0.75	1.22	1.03	0.96	1.17	1.17	1.27	1.15	1.27	1.46	2.04	1.33	1.66	1.68	2.07	2.23	3.03	1.34	1.08

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($274,611K + $311,279K) ÷ $1,041,080K
= 0.56

The cash ratio of SolarEdge Technologies Inc, which measures the company's ability to cover its short-term liabilities with its available cash and cash equivalents, has fluctuated over the past few years.

From March 31, 2020 to September 30, 2020, there was a significant increase in the cash ratio from 1.08 to 3.03, indicating a substantial improvement in the company's liquidity position. This could have been due to an increase in cash reserves or a decrease in short-term liabilities during this period.

Subsequently, the cash ratio stayed relatively stable from December 31, 2020 to March 31, 2022, hovering around 2.0, which suggests that SolarEdge Technologies Inc maintained a healthy cash position relative to its short-term liabilities.

However, from June 30, 2022 onwards, the cash ratio started to decline gradually. By December 31, 2024, the cash ratio dropped to 0.56, indicating a weakening liquidity position compared to the earlier periods. This declining trend might raise concerns about the company's ability to meet its short-term obligations solely through its cash reserves.

Overall, while the cash ratio of SolarEdge Technologies Inc has shown fluctuations over the years, investors and stakeholders may need to closely monitor the trend to assess the company's liquidity strength and risk of potential cash flow challenges in the future.