SPS Commerce Inc (SPSC)

Cash ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cash and cash equivalents	US$ in thousands	241,017	198,842	240,232	234,637	219,081	178,702	209,264	182,304	162,893	186,230	212,725	203,088	207,552	195,803	184,367	169,274	149,692	208,930	174,850	184,484
Short-term investments	US$ in thousands	0	6,931	31,554	56,174	56,359	60,628	60,914	51,146	51,412	50,928	46,513	39,968	49,758	56,183	48,999	39,174	37,786	52,300	50,775	30,074
Total current liabilities	US$ in thousands	146,684	146,331	128,546	134,216	130,669	132,871	111,968	106,961	110,642	105,466	101,239	94,428	102,872	94,928	91,437	83,432	80,132	70,389	66,735	61,903
Cash ratio		1.64	1.41	2.11	2.17	2.11	1.80	2.41	2.18	1.94	2.25	2.56	2.57	2.50	2.65	2.55	2.50	2.34	3.71	3.38	3.47

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($241,017K + $0K) ÷ $146,684K
= 1.64

The cash ratio of SPS Commerce Inc has shown fluctuations over the years, indicating changes in the company's ability to cover its short-term obligations with its cash and cash equivalents. The ratio, which measures the proportion of cash and cash equivalents to current liabilities, was relatively high in the earlier periods, hovering around 3.5. However, it declined significantly to around 2.3 by the end of December 2020, suggesting a potential decrease in the company's liquidity.

Subsequently, the ratio gradually improved but remained below the initial levels, fluctuating between 2.0 and 2.7 until September 2022. From there, the ratio decreased notably to a low of 1.41 by the end of September 2024, indicating a potential strain on the company's ability to meet its short-term obligations with its available cash holdings.

Overall, the trend in SPS Commerce Inc's cash ratio suggests fluctuations in liquidity levels over the years, with periods of stronger and weaker cash position. It is essential for stakeholders to monitor these changes closely to assess the company's ability to manage its short-term financial commitments effectively.