Autodesk Inc. (NASDAQ:ADSK)

Current Ratio

The current ratio exhibits considerable fluctuation over the observed periods, generally remaining below or around 1.0. Initially, the ratio starts at 0.64 in April 2019, declines slightly to 0.56 by July 2019, and gradually improves reaching 0.83 in January 2020. Following this peak, the ratio maintains relative stability around the mid-0.8 mark through early 2021. However, a sharp decline to 0.48 in April 2021 indicates a significant reduction in short-term liquidity, before rebounding to 0.81 in October 2021. Subsequently, it undergoes moderate oscillations, mostly remaining between 0.6 and 0.8 until the most recent data point in October 2024, where it settles at 0.65. This pattern suggests periodic liquidity pressures are being addressed but highlights inconsistent short-term financial resilience.

Quick Ratio

The quick ratio trends similarly to the current ratio but at slightly lower levels, reflecting the exclusion of inventory from liquid assets. Starting at 0.56 in April 2019, there is a slight dip to 0.49 in mid-2019, followed by an upward trend peaking at 0.78 in January 2020. The ratio stabilizes near 0.77 until early 2021, then experiences a notable drop to 0.4 in April 2021, mirroring liquidity tightening observed in the current ratio. Recovery is evident with values increasing back to around 0.72 by October 2021. Later periods show moderate variability between approximately 0.5 and 0.7, with the ratio at 0.54 in the latest quarter. These dynamics reinforce a pattern of fluctuating but managed immediate liquidity.

Cash Ratio

The cash ratio remains consistently lower than both the current and quick ratios throughout, highlighting reliance on non-cash current assets for liquidity. It begins at 0.44 in April 2019, falls to 0.36 by October 2019, and then rises steadily to 0.57 in January 2020, maintaining that level through mid-2020. A decline occurs again in the first few months of 2021, reaching a low of 0.29 in April 2021, indicative of reduced cash and cash equivalents. Partial recovery follows with the ratio climbing back towards 0.55 by late 2021. The subsequent quarters show a gradual downtrend with some fluctuations, ending near 0.38 at the last data point. Overall, the cash ratio trend indicates relatively low but somewhat stable cash reserves with periods of cash tightening.

Summary of Liquidity Trends

Collectively, the liquidity ratios reveal that the company experiences cycles of liquidity tightening, particularly observable around the second quarter of 2021 across all ratios. The recoveries following these periods suggest adaptive financial management aimed at restoring liquidity positions. Nonetheless, all ratios remain below or near 1.0 consistently, pointing to moderate short-term liquidity risk. The persistent gap between current and quick ratios compared to cash ratios implies a reliance on assets other than cash, such as receivables, to meet short-term obligations. The volatility across quarters underlines the importance of continuous liquidity monitoring to maintain operational stability.

The analysis of the quarterly financial data reveals notable fluctuations in the company's liquidity position over the observed periods. Current assets exhibit variability, with initial amounts around 1,400 to 1,700 million US dollars during 2019, followed by significant increases peaking close to 3,500 million in early 2024. Despite some regressions, there is an overall upward trend in current asset levels, indicating growing short-term resources.

Current liabilities also show considerable growth, beginning near 2,200 million US dollars and rising steadily toward approximately 4,400 million by late 2024. The escalation in liabilities outpaces the growth in assets, which impacts the current ratio results.

The current ratio, a key indicator of short-term financial health, consistently remains below 1 throughout all periods, highlighting ongoing challenges in covering short-term obligations entirely with current assets. Starting from roughly 0.6 in 2019, the ratio improves moderately, reaching highs around 0.83 but often retreating again, showing oscillating liquidity pressures.

In summary, although current assets have generally increased, current liabilities have expanded at a comparable or faster pace. This dynamic results in a persistent current ratio under 1, reflecting a relatively constrained liquidity position that warrants attention. The company appears to manage its working capital with some fluctuations, but maintaining or improving the current ratio will be important to enhance its short-term financial stability.

Current Assets Trend

Overall upward trend with significant quarterly fluctuations; growth from approximately 1,400 to nearly 3,600 million US dollars over the observed timeframe.

Current Liabilities Trend

Steady increase across quarters, growing from around 2,200 to 4,400 million US dollars, often surpassing asset growth.

Current Ratio Analysis

Consistently below 1, ranging roughly between 0.48 and 0.84; indicates ongoing liquidity constraints despite periods of improvement.

Implications

The disparity between rising liabilities and assets leads to a current ratio under 1, signaling challenges in short-term financial solvency; monitoring and improving liquidity management is advisable.

The analysis of the quarterly financial data reveals fluctuating liquidity trends over the observed periods. The total quick assets exhibit significant variability with some notable peaks and declines. Initially, from April 2019 to January 2020, total quick assets increased substantially, reaching a peak around January 2020. This was followed by a decline in the first half of 2021, with a recovery trend observed from mid-2021 through early 2024, where the values generally increased again, although with some fluctuations towards the most recent quarters.

Current liabilities also displayed considerable movement over time. From April 2019 through January 2020, current liabilities increased steadily. Following this, liabilities remained relatively high and generally trended upward throughout 2021 and into 2024, with periodic peaks and slight decreases but maintaining an overall elevated level compared to early periods.

The quick ratio, which measures short-term liquidity by comparing quick assets to current liabilities, reflected these underlying trends with notable variations. Initially, the quick ratio showed a modest increase from April 2019 to January 2020, indicating improved liquidity during that period. However, during 2021, the ratio dropped sharply, suggesting a decrease in liquidity position relative to liabilities. From early 2022 onwards, the quick ratio exhibited a moderate upward trend with some oscillations, generally staying within the range of 0.5 to 0.7, indicating a somewhat stable but not strong liquidity position in recent quarters.

Total quick assets

Displayed substantial volatility but an overall pattern of recovery and growth following dips, particularly strong increases before early 2020 and after mid-2021.

Current liabilities

Represented a rising trend over the entire period, with values consistently higher in recent years compared to the initial quarters.

Quick ratio

Initially improved, then declined markedly across 2021, followed by partial recovery and stabilization below 1.0, indicating reliance on quick assets has decreased relative to liabilities but remains moderately sufficient.

In summary, the company’s liquidity position, as measured by the quick ratio, has experienced pressures due to the rising current liabilities, despite fluctuations in quick assets. The trends suggest ongoing management challenges in balancing short-term obligations with readily available assets, although the recent stabilization of the quick ratio points to some improvement in managing liquidity risk.

Cash Assets Trend

The total cash assets exhibited fluctuations over the observed periods. Initially, a gradual increase was noted from 972 million US dollars in April 2019 to a peak of 1857 million in January 2021, indicating a strengthening liquidity position. However, a sharp decline followed, with cash assets dropping to as low as 923 million by April 2021. Subsequent quarters showed recovery, reaching a higher peak of 2246 million by January 2024, before a slight decline resumed, ending near 1713 million by October 2024. This pattern suggests periods of both accumulation and utilization of cash resources, reflecting variable cash management or operational cash flows.

Current Liabilities Trend

Current liabilities demonstrated an overall upward trajectory across the periods, starting from 2221 million US dollars in April 2019 and rising steadily to 4468 million by October 2024. Notable increments occurred around January 2022 and sustained increases thereafter, indicating a rising short-term obligation level. The consistent increase in current liabilities may imply an expansion in operational scale, increased short-term borrowing, or other factors driving higher short-term payables.

Cash Ratio Analysis

The cash ratio, representing the company's ability to cover its current liabilities with cash assets, showed significant variability. Initially, it decreased from 0.44 in April 2019 to a low near 0.36 in October 2019, then improved substantially to around 0.57 during early 2020, reflecting an improved liquidity cushion. A sharp drop to approximately 0.29 occurred in April 2021, coinciding with the reduction in cash assets and the increase in current liabilities observed in the same period. From mid-2021 onwards, the ratio gradually improved again, reaching above 0.5 by early 2024, before declining towards 0.38 by October 2024. This fluctuation in cash ratio indicates varying confidence in short-term liquidity, influenced by cash holdings and liability levels.

Overall Insights

The data reveals a dynamic liquidity and liability environment. Despite fluctuations, the company maintained a cash ratio generally below 1, indicating that cash assets alone do not fully cover current liabilities at most points. The periods of increased cash assets and temporarily improved cash ratios suggest strategic liquidity management to buffer against rising current liabilities. However, the persistent rise in current liabilities warrants attention, as it may impact short-term financial stability if not managed alongside adequate cash or liquid asset growth. The alternating peaks and troughs in cash and liquidity ratios imply responsiveness to operational demands or market conditions over time.