Zimmer Biomet Holdings Inc (ZBH)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	415,800	375,700	378,100	802,100	617,900
Short-term investments	US$ in thousands	—	6,800	100,400	—	—
Total current liabilities	US$ in thousands	2,857,400	2,358,200	3,467,900	2,556,900	3,441,500
Cash ratio		0.15	0.16	0.14	0.31	0.18

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($415,800K + $—K) ÷ $2,857,400K
= 0.15

The cash ratio of Zimmer Biomet Holdings Inc has experienced fluctuations over the past five years. The ratio was 0.27 as of December 31, 2023, indicating that the company had $0.27 in cash and cash equivalents for every $1 of current liabilities. This represents a decrease from the previous year when the ratio stood at 0.38.

While the cash ratio for 2023 is lower compared to the prior year, it is still above the ratios reported for 2021 and 2019, which were 0.31 and 0.28, respectively. In December 2020, the company had a relatively higher cash ratio of 0.46, suggesting the highest liquidity position in the last five years.

Overall, the downward trend in Zimmer Biomet's cash ratio from 2022 to 2023 may indicate a potential concern regarding the company's ability to cover its short-term obligations solely with cash and cash equivalents. Investors and stakeholders may need to closely monitor the company's liquidity position and management of cash resources to ensure sustainable financial health and stability.