Vertex Pharmaceuticals Inc (VRTX)

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	4,569,600	5,239,200	4,580,100	9,158,000	10,369,100	11,110,200	10,151,100	9,289,900	10,504,000	9,171,500	8,702,200	7,600,100	6,795,000	6,275,700	6,063,700	6,304,300	5,988,200	5,358,090	4,831,330	3,593,410
Short-term investments	US$ in thousands	1,582,900	1,318,700	1,246,000	1,056,700	895,200	864,400	1,137,800	1,272,300	391,300	722,000	622,300	793,300	960,800	903,951	798,410	763,124	866,491	1,105,650	838,764	762,162
Total current liabilities	US$ in thousands	3,564,600	3,973,100	3,547,200	3,795,900	3,547,400	3,599,400	3,352,100	3,026,200	2,742,100	2,609,300	2,556,200	2,180,200	2,142,000	1,914,260	1,836,450	1,944,050	1,877,500	2,004,030	1,798,640	1,538,750
Cash ratio		1.73	1.65	1.64	2.69	3.18	3.33	3.37	3.49	3.97	3.79	3.65	3.85	3.62	3.75	3.74	3.64	3.65	3.23	3.15	2.83

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($4,569,600K + $1,582,900K) ÷ $3,564,600K
= 1.73

The cash ratio of Vertex Pharmaceuticals Inc has shown fluctuations over the past few years. It started at a relatively high level of 2.83 as of March 31, 2020, indicating that the company had $2.83 in cash and cash equivalents for every $1 of current liabilities, providing a strong liquidity position. The ratio then improved steadily, reaching a peak of 3.97 as of December 31, 2022. This sustained increase suggested that Vertex Pharmaceuticals Inc was consistently able to cover its short-term obligations with its available cash resources.

However, the cash ratio started to decline after December 2022, dropping to 1.73 by the end of December 31, 2024. This decrease in the ratio may raise concerns about the company's ability to meet its short-term liabilities solely through cash holdings. It is important for stakeholders to monitor this trend closely to assess if Vertex Pharmaceuticals Inc needs to improve its liquidity position or if there are specific reasons for the decline in the cash ratio.

Overall, while Vertex Pharmaceuticals Inc has maintained a relatively strong cash ratio historically, the recent downward trend warrants further analysis to understand the factors contributing to the decline and determine any potential implications for the company's financial health and liquidity management.