Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | ||
---|---|---|---|---|---|---|---|
Current ratio | |||||||
Quick ratio | |||||||
Cash ratio |
Based on: 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31).
- Current Ratio
- The current ratio demonstrated an initial increase from 1.83 in 2019 to a peak of 2.26 in 2020, indicating improved short-term liquidity during this period. Subsequently, there was a decline through the following years, dropping to 1.29 by 2024. This decreasing trend suggests a gradual reduction in liquid assets relative to current liabilities after 2020, possibly reflecting changes in working capital management or operational requirements.
- Quick Ratio
- The quick ratio followed a similar trajectory, rising from 1.44 in 2019 to 2.04 in 2020, which indicates enhanced liquidity when inventory is excluded. However, this ratio saw a consistent decrease in the years after 2020, falling markedly to 0.71 by 2024. This significant reduction points to a weakening in the company's ability to cover short-term obligations with its most liquid assets.
- Cash Ratio
- The cash ratio also peaked in 2020 at 2.00 from 1.39 in 2019, indicating a strong cash position at that time. From 2020 onwards, it exhibited a steep decline reaching 0.54 in 2024. This sharp downturn highlights a pronounced decrease in cash and cash equivalents relative to current liabilities, suggesting potential liquidity risks or strategic deployment of cash resources.
Current Ratio
Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||||
Current assets | |||||||
Current liabilities | |||||||
Liquidity Ratio | |||||||
Current ratio1 | |||||||
Benchmarks | |||||||
Current Ratio, Competitors2 | |||||||
Accenture PLC | |||||||
Adobe Inc. | |||||||
Cadence Design Systems Inc. | |||||||
CrowdStrike Holdings Inc. | |||||||
Fair Isaac Corp. | |||||||
International Business Machines Corp. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Palantir Technologies Inc. | |||||||
Palo Alto Networks Inc. | |||||||
Salesforce Inc. | |||||||
ServiceNow Inc. | |||||||
Synopsys Inc. | |||||||
Workday Inc. | |||||||
Current Ratio, Sector | |||||||
Software & Services | |||||||
Current Ratio, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- The current assets experienced significant fluctuations over the analyzed periods. Starting at 3,594 million USD in July 2019, the figure more than doubled to 7,980 million USD in July 2020. Subsequently, there was a noticeable decrease to 5,157 million USD in July 2021, which remained relatively stable through July 2022 at 5,047 million USD. The value showed a modest recovery to 5,557 million USD in July 2023, followed by a substantial increase reaching 9,678 million USD in July 2024, indicating a strong rebound and growth in liquid and short-term resources.
- Current Liabilities
- Current liabilities followed an overall upward trend with some volatility. The liabilities rose sharply from 1,966 million USD in July 2019 to 3,529 million USD in July 2020. They then declined to 2,655 million USD in July 2021 before increasing again to 3,630 million USD in July 2022 and slightly more to 3,790 million USD in July 2023. A substantial jump to 7,491 million USD was observed in July 2024, nearly doubling from the previous year and marking a significant increase in obligations due within one year.
- Current Ratio
- The current ratio showed a declining trend after peaking in July 2020. It increased from 1.83 in July 2019 to 2.26 in July 2020, reflecting improved short-term financial stability. However, the ratio dropped to 1.94 in July 2021 and continued to decline to 1.39 in July 2022. A slight improvement occurred in July 2023 with the ratio at 1.47, but it decreased again to 1.29 in July 2024. Despite the large increase in current assets in the last year, the proportionally higher increase in current liabilities reduced the current ratio, indicating a decreased margin of safety for covering short-term liabilities with short-term assets.
Quick Ratio
Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||||
Cash and cash equivalents | |||||||
Investments | |||||||
Accounts receivable, net of allowance for doubtful accounts | |||||||
Notes receivable held for investment, net | |||||||
Notes receivable held for sale | |||||||
Total quick assets | |||||||
Current liabilities | |||||||
Liquidity Ratio | |||||||
Quick ratio1 | |||||||
Benchmarks | |||||||
Quick Ratio, Competitors2 | |||||||
Accenture PLC | |||||||
Adobe Inc. | |||||||
Cadence Design Systems Inc. | |||||||
CrowdStrike Holdings Inc. | |||||||
Fair Isaac Corp. | |||||||
International Business Machines Corp. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Palantir Technologies Inc. | |||||||
Palo Alto Networks Inc. | |||||||
Salesforce Inc. | |||||||
ServiceNow Inc. | |||||||
Synopsys Inc. | |||||||
Workday Inc. | |||||||
Quick Ratio, Sector | |||||||
Software & Services | |||||||
Quick Ratio, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The analysis of the financial data over the six-year period reveals notable fluctuations in key liquidity measures. The total quick assets experienced a substantial rise from 2019 to 2020, increasing from 2,827 million to 7,199 million US dollars. However, this was followed by a significant decline in 2021 to 4,393 million, and a further slight decrease in 2022 to 4,236 million. A gradual recovery occurred in 2023 and 2024, with quick assets reaching 4,754 million and 5,313 million US dollars, respectively.
Current liabilities displayed a generally increasing trend with notable volatility. Starting at 1,966 million US dollars in 2019, liabilities surged to 3,529 million in 2020, declined to 2,655 million in 2021, then rose again sharply to 3,630 million in 2022 and 3,790 million in 2023, before experiencing a dramatic increase to 7,491 million in 2024. This significant jump in 2024 represents more than a doubling of liabilities compared to the previous year.
The quick ratio, representing the company's liquidity position, reflects the combined effects of changes in quick assets and current liabilities. The ratio peaked at 2.04 in 2020, indicating strong liquidity. However, it declined consistently thereafter, dropping to 1.65 in 2021 and further to 1.17 in 2022. Although there was a slight improvement to 1.25 in 2023, the ratio fell sharply to 0.71 in 2024, signaling potential liquidity concerns as quick assets are less than current liabilities by this point.
- Trends in Liquidity
- Total quick assets showed an initial surge followed by decline and a partial recovery, whereas current liabilities presented an upward trend with significant variability, culminating in a sharp increase in the last period.
- Quick Ratio Implications
- The quick ratio's peak in 2020 reflected strong immediate liquidity, but its subsequent decline, especially the marked drop in 2024, could indicate challenges in meeting short-term obligations without relying on inventory sales.
- Financial Position Insights
- The increased liabilities, notably in 2024, coupled with declining quick assets relative to liabilities, may imply increased financial risk or changes in working capital management that warrant further detailed investigation.
Cash Ratio
Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||||
Cash and cash equivalents | |||||||
Investments | |||||||
Total cash assets | |||||||
Current liabilities | |||||||
Liquidity Ratio | |||||||
Cash ratio1 | |||||||
Benchmarks | |||||||
Cash Ratio, Competitors2 | |||||||
Accenture PLC | |||||||
Adobe Inc. | |||||||
Cadence Design Systems Inc. | |||||||
CrowdStrike Holdings Inc. | |||||||
Fair Isaac Corp. | |||||||
International Business Machines Corp. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Palantir Technologies Inc. | |||||||
Palo Alto Networks Inc. | |||||||
Salesforce Inc. | |||||||
ServiceNow Inc. | |||||||
Synopsys Inc. | |||||||
Workday Inc. | |||||||
Cash Ratio, Sector | |||||||
Software & Services | |||||||
Cash Ratio, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the company's cash position and liquidity over the analyzed period.
- Total cash assets
- Cash holdings peaked significantly in the fiscal year ending July 31, 2020, reaching 7,050 million US dollars. This represented a sharp increase from 2,740 million US dollars in the prior year. However, this level was not sustained in subsequent years, as cash assets declined to 3,870 million in 2021 and further decreased to a low of 3,281 million in 2022. There was a modest recovery in 2023 and 2024, with cash assets rising to 3,662 million and 4,074 million respectively, though still well below the 2020 peak.
- Current liabilities
- Current liabilities showed a general upward trend throughout the period. Beginning at 1,966 million US dollars in 2019, liabilities rose sharply to 3,529 million in 2020, followed by some fluctuation including a slight decrease to 2,655 million in 2021, then climbing to 3,630 million in 2022 and 3,790 million in 2023. The most significant increase occurred in 2024, when current liabilities more than doubled to 7,491 million US dollars.
- Cash ratio
- The cash ratio, which measures the company's ability to cover current liabilities with cash assets, followed a declining trajectory from a strong 2.00 in 2020 down to 0.54 in 2024. This downward trend reflects a reduction in liquidity buffer, influenced by both diminishing cash assets after the peak in 2020 and the substantial increase in current liabilities by 2024. The ratio below 1.0 in the last three years indicates that the company’s cash assets are insufficient to cover its current liabilities fully.
Overall, the data suggests a notable peak in cash reserves in 2020 followed by a reduction and a concerning increase in current liabilities in recent years. Consequently, liquidity as measured by the cash ratio has weakened considerably, highlighting potential pressure on the firm’s short-term financial flexibility.