Sitime Corporation (SITM)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	544,060	623,242	669,067	625,943	113,180
Total current liabilities	US$ in thousands	108,449	121,394	33,794	37,385	19,145
Current ratio		5.02	5.13	19.80	16.74	5.91

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $544,060K ÷ $108,449K
= 5.02

Based on the data provided, Sitime Corporation's current ratio has experienced fluctuations over the past five years.

The current ratio is an indicator of a company's ability to cover its short-term liabilities with its short-term assets. A higher current ratio is generally seen as favorable as it suggests the company is more capable of meeting its short-term obligations.

In December 2020, Sitime Corporation had a current ratio of 5.91, indicating a healthy liquidity position. This ratio significantly improved in the following years, reaching 16.74 in December 2021 and further increasing to 19.80 in December 2022. These high ratios suggest that the company had a substantial amount of current assets relative to its current liabilities during these years.

However, there was a notable decrease in the current ratio in December 2023 and December 2024, where the ratios dropped to 5.13 and 5.02 respectively. While these ratios are still above 1, indicating the company can cover its short-term obligations, the decline suggests a potential deterioration in the liquidity position compared to the previous years.

In conclusion, Sitime Corporation's current ratio has shown variability over the five-year period, with significant improvements followed by a slight decline in recent years. It is essential for the company to monitor its liquidity closely to ensure it can meet its short-term obligations effectively in the future.