SolarEdge Technologies Inc (SEDG)

Current ratio

		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	Dec 31, 2019	Sep 30, 2019
Total current assets	US$ in thousands	2,893,200	2,989,070	3,304,310	3,363,470	3,449,120	3,242,070	2,899,660	2,451,770	2,283,810	2,462,320	1,711,290	1,552,550	1,488,910	1,585,110	1,719,340	1,744,980	1,073,000	955,919	932,763	834,803
Total current liabilities	US$ in thousands	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	436,714	335,407
Current ratio		5.10	4.54	3.70	3.84	3.84	3.60	3.26	3.53	3.73	4.33	3.26	3.83	3.73	3.99	3.94	4.56	2.65	2.45	2.14	2.49

June 30, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $2,893,200K ÷ $566,824K
= 5.10

The current ratio of SolarEdge Technologies Inc has shown an improving trend over the past few quarters, indicating the company's ability to meet its short-term obligations with its current assets. The ratio has ranged from 2.14 to 5.10 over the past five years, with the latest ratio as of June 30, 2024, at 5.10, reflecting a strong liquidity position. This means that the company has $5.10 in current assets for every $1 in current liabilities.

The significant improvement in the current ratio from 2.49 in December 2019 to 5.10 in June 2024 is a positive sign, suggesting improved liquidity and financial health. A ratio above 2 indicates that the company is in a good position to cover its short-term liabilities. The consistent increase in the current ratio over the quarters demonstrates effective management of working capital and a stronger financial position.

However, it is important to note that while a high current ratio is generally favorable, an excessively high ratio may also indicate an inefficient use of assets. It is essential for the company to strike a balance between liquidity and efficiency in managing its current assets and liabilities to ensure sustainable financial performance in the long run.