Veracyte Inc (VCYT)

Cash ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash and cash equivalents US$ in thousands 239,087 216,454 154,247 173,197 349,364
Short-term investments US$ in thousands 50,354 0 24,605 3,964 —
Total current liabilities US$ in thousands 78,633 61,241 62,614 64,151 16,781
Cash ratio 3.68 3.53 2.86 2.76 20.82

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($239,087K + $50,354K) ÷ $78,633K
= 3.68

The cash ratio of Veracyte Inc has exhibited notable fluctuations over the observed period from December 31, 2020, to December 31, 2024. At the end of 2020, the cash ratio was substantially high at 20.82, indicating that the company had a robust level of cash and cash equivalents relative to its current liabilities. This suggests a significant cash cushion, which could be reflective of conservative liquidity management or recent strategic liquidity positioning at that time.

By the end of 2021, the cash ratio experienced a marked decline to 2.76. Despite this decrease, the ratio remained well above the generally acceptable benchmark of 1, signifying that the company maintained more than enough cash to cover its current liabilities at that point. The sharp reduction could infer increased usage of cash resources, potentially due to operational expenditures, investments, or other strategic cash outflows, but still reflects a strong liquidity position.

The subsequent year, 2022, saw a slight increase in the cash ratio to 2.86. This marginal uptick suggests a modest improvement in cash reserves relative to current liabilities, implying either a stabilization or a modest accumulation of cash during that period.

In 2023, the cash ratio continued its upward trend to 3.53, indicating further strengthening of cash holdings relative to current liabilities. This increase could denote improved cash generation or a reduction in short-term obligations, contributing positively to the company's liquidity profile.

The trend persisted into 2024, with the cash ratio reaching 3.68. The sustained increase over consecutive years underscores a consistent trend toward greater liquidity relative to current liabilities. Such a pattern may reflect strategic cash accumulation, prudent liquidity management, or a combination of both.

Overall, the data demonstrates a declining trend from a very high initial ratio in 2020 to more moderate but still robust levels in subsequent years. The current ratios, all well above 1, indicate that Veracyte Inc has maintained a comfortable liquidity position throughout the observed period, with a gradual accumulation of cash relative to its liabilities, which could support operational resilience and strategic flexibility.