SPS Commerce Inc (SPSC)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	219,081	162,893	207,552	149,692	179,252
Short-term investments	US$ in thousands	56,359	51,412	49,758	37,786	34,284
Total current liabilities	US$ in thousands	130,669	110,642	102,872	80,132	68,030
Cash ratio		2.11	1.94	2.50	2.34	3.14

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($219,081K + $56,359K) ÷ $130,669K
= 2.11

The cash ratio of SPS Commerce Inc. has fluctuated over the past five years, ranging from 2.56 to 3.82. The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents.

In 2023, the cash ratio of 2.71 indicates that the company has $2.71 of cash and cash equivalents for every $1 of current liabilities. This suggests a slight decrease compared to the prior year's ratio of 2.56 but remains at a healthy level.

The cash ratio was highest in 2019 at 3.82, indicating a peak in the company's ability to cover its short-term obligations with cash. The subsequent years show a downward trend in the cash ratio but still remain above 2.

Overall, the cash ratio of SPS Commerce Inc. has shown fluctuations but has generally stayed above 2, indicating a strong liquidity position and the ability to meet its short-term obligations using readily available cash resources.