Silicon Laboratories Inc (SLAB)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	227,504	499,915	1,074,620	202,720	227,146
Short-term investments	US$ in thousands	211,720	692,024	964,582	521,963	498,825
Total current liabilities	US$ in thousands	163,570	185,776	668,827	284,498	137,701
Cash ratio		2.69	6.42	3.05	2.55	5.27

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($227,504K + $211,720K) ÷ $163,570K
= 2.69

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. Silicon Laboratories Inc's cash ratio has fluctuated over the past five years, ranging from a low of 2.55 in 2020 to a high of 6.42 in 2022. The cash ratio indicates the company's strong liquidity position, with the ability to cover over 2.5 times its short-term liabilities with cash on hand in each of the past five years.

The sharp increase in the cash ratio in 2022 suggests a significant improvement in the company's liquidity position, possibly due to increased cash reserves or reduced short-term liabilities. Meanwhile, the decrease in the cash ratio in 2020 might suggest a temporary decrease in liquidity compared to the surrounding years. Overall, Silicon Laboratories Inc appears to maintain a healthy level of liquidity, as indicated by its consistently high cash ratios in recent years.