Sensata Technologies Holding NV (ST)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	508,104	1,225,520	1,708,960	1,861,980	774,119
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	823,718	1,178,970	836,259	1,495,160	634,746
Cash ratio		0.62	1.04	2.04	1.25	1.22

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($508,104K + $—K) ÷ $823,718K
= 0.62

The cash ratio of Sensata Technologies Holding Plc has shown a declining trend over the past five years. As of December 31, 2023, the cash ratio stands at 0.78, indicating that the company has $0.78 in cash for every $1 of current liabilities. This represents a significant drop from the previous year's value of 1.18.

The downward trend in the cash ratio could signal potential liquidity concerns for the company, as it suggests a lower level of cash reserves relative to its short-term obligations. A declining cash ratio may indicate challenges in meeting immediate payment obligations without relying on other sources of liquidity.

It is important for stakeholders to closely monitor Sensata Technologies' liquidity position and assess its ability to manage short-term financial commitments. Further analysis of the company's cash flow management and working capital efficiency may be warranted to better understand the factors driving the decreasing cash ratio over the years.