Sitime Corporation (SITM)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	6,106	9,468	34,603	559,461	73,525
Short-term investments	US$ in thousands	412,728	518,733	529,494	0	—
Total current liabilities	US$ in thousands	108,449	121,394	33,794	37,385	19,145
Cash ratio		3.86	4.35	16.69	14.96	3.84

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($6,106K + $412,728K) ÷ $108,449K
= 3.86

The cash ratio of Sitime Corporation has shown significant fluctuations over the past five years. In December 2020, the cash ratio was 3.84, indicating that the company had $3.84 in cash and cash equivalents for every $1 of current liabilities.

By the end of December 2021, the cash ratio had increased substantially to 14.96, suggesting a strong liquidity position with $14.96 in cash and cash equivalents for every $1 of current liabilities. This sharp increase could be a result of increased cash reserves or a reduction in current liabilities.

In December 2022, the cash ratio further improved to 16.69, indicating a very robust liquidity position with $16.69 in cash and cash equivalents for each $1 of current liabilities. This increase could signal prudent financial management or cash flow optimization strategies.

However, by the end of December 2023, the cash ratio had decreased to 4.35, representing a decline in liquidity compared to the previous year. This reduction may be due to a decrease in cash reserves or an increase in current liabilities.

In the most recent period, December 2024, the cash ratio was 3.86, suggesting that Sitime Corporation had $3.86 in cash and cash equivalents for every $1 of current liabilities. This indicates a slight decrease in liquidity compared to the previous year.

Overall, the cash ratio of Sitime Corporation has experienced fluctuations over the past five years, with notable improvements in liquidity in 2021 and 2022, followed by a decline in 2023. It is essential for the company to monitor its liquidity position closely to ensure it can meet its short-term obligations efficiently.