Super Micro Computer Inc (SMCI)

Cash ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Cash and cash equivalents	US$ in thousands	1,669,770	440,459	267,397	232,266	210,533
Short-term investments	US$ in thousands	—	100	300	4,578	128
Total current liabilities	US$ in thousands	2,345,720	1,374,650	1,470,020	968,896	707,635
Cash ratio		0.71	0.32	0.18	0.24	0.30

June 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,669,770K + $—K) ÷ $2,345,720K
= 0.71

The cash ratio measures a company's ability to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio indicates a stronger liquidity position.

For Super Micro Computer Inc, the cash ratio has fluctuated over the years as follows:
- June 30, 2020: 0.30
- June 30, 2021: 0.24
- June 30, 2022: 0.18
- June 30, 2023: 0.32
- June 30, 2024: 0.71

The trend shows some variability, with a decrease in the cash ratio from 2020 to 2022, followed by a substantial increase in 2024. The cash ratio was at its lowest in 2022 at 0.18, indicating a lower ability to cover short-term obligations with available cash. However, the significant improvement to 0.71 in 2024 suggests a strengthened liquidity position, which may be the result of effective cash management or improved cash reserves.

Overall, Super Micro Computer Inc's cash ratio analysis highlights the company's ability to manage short-term liquidity needs and indicates a positive shift towards a stronger cash position in 2024.