Vericel Corp Ord (VCEL)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	69,088	51,067	68,330	33,620	26,889
Short-term investments	US$ in thousands	40,469	68,471	35,068	42,187	42,829
Total current liabilities	US$ in thousands	45,749	37,463	26,052	22,483	19,795
Cash ratio		2.39	3.19	3.97	3.37	3.52

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($69,088K + $40,469K) ÷ $45,749K
= 2.39

The cash ratio of Vericel Corp has shown a fluctuating trend over the past five years, ranging from 2.54 in 2023 to 4.13 in 2021. This ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of funding.

The downward trend in the cash ratio from 2021 to 2023 may indicate a decrease in Vericel Corp's liquidity position or a shift in its cash management strategy. While a ratio above 1 suggests the company can cover its short-term obligations, investors and creditors may prefer to see a more consistent or increasing trend in the cash ratio to ensure financial stability and flexibility.

It is important for Vericel Corp to closely monitor its cash position and manage its liquidity effectively to ensure it can meet its financial obligations in a timely manner and sustain its operations. Further analysis of the company's cash flow statement and liquidity management practices may provide additional insights into the factors underlying the fluctuations in the cash ratio over the years.