Xencor Inc (XNCR)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	53,790	53,942	143,480	163,544	50,312
Short-term investments	US$ in thousands	539,935	569,120	190,627	439,459	479,470
Total current liabilities	US$ in thousands	84,709	63,844	70,738	121,061	66,558
Cash ratio		7.01	9.76	4.72	4.98	7.96

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($53,790K + $539,935K) ÷ $84,709K
= 7.01

The cash ratio of Xencor Inc has fluctuated over the past five years, ranging from a low of 5.06 in 2021 to a high of 10.12 in 2022. The cash ratio measures a company's ability to cover short-term liabilities with its cash and cash equivalents.

A higher cash ratio indicates that the company has more cash on hand relative to its current liabilities, suggesting a stronger liquidity position. The significant increase in the cash ratio from 2021 to 2022 may indicate improved liquidity management or an increase in cash reserves during that period.

It is important to note that while a high cash ratio can be a positive indicator of liquidity, excessively high levels of cash may also imply that the company is not efficiently utilizing its resources to generate returns. Therefore, it is essential for Xencor Inc to strike a balance between maintaining liquidity and investing excess cash in value-creating opportunities.