Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Palantir Technologies Inc., liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | 5.96 | 5.55 | 5.17 | 4.34 | 3.74 | |
| Quick ratio | 5.83 | 5.41 | 4.92 | 4.11 | 3.59 | |
| Cash ratio | 5.25 | 4.93 | 4.48 | 3.83 | 3.33 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Current Ratio
- The current ratio demonstrates a consistent upward trend over the five-year period, starting at 3.74 in 2020 and increasing to 5.96 by 2024. This suggests an improvement in the company's ability to cover short-term liabilities with short-term assets, indicating strengthening liquidity and potentially lower risk in meeting obligations as time progresses.
- Quick Ratio
- The quick ratio follows a similar trajectory, rising steadily from 3.59 in 2020 to 5.83 in 2024. This increase shows enhanced capacity to meet immediate liabilities without relying on inventory sales, reflecting stronger liquid assets relative to current liabilities over the years.
- Cash Ratio
- The cash ratio also exhibits continuous growth, increasing from 3.33 in 2020 to 5.25 in 2024. The rise in cash and cash equivalents relative to current liabilities underscores a solid cash position, highlighting the company's increasing financial flexibility and liquidity strength across the analyzed period.
- Overall Liquidity Analysis
- The upward trends across all three liquidity ratios indicate a progressive strengthening of the company’s short-term financial stability. The consistent improvement suggests prudent liquidity management and a growing cushion to absorb short-term financial demands. The ratios being well above 1 in all years further emphasize a robust liquidity position throughout the observed timeframe.
Current Ratio
Palantir Technologies Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 5,934,289) | 4,138,618) | 3,041,577) | 2,863,250) | 2,257,429) | |
| Current liabilities | 996,018) | 746,018) | 587,941) | 660,061) | 603,823) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 5.96 | 5.55 | 5.17 | 4.34 | 3.74 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Accenture PLC | 1.10 | 1.30 | 1.23 | 1.25 | 1.40 | |
| Adobe Inc. | 1.07 | 1.34 | 1.11 | 1.25 | 1.48 | |
| AppLovin Corp. | 2.19 | 1.71 | 3.35 | 5.05 | — | |
| Cadence Design Systems Inc. | 2.93 | 1.24 | 1.27 | 1.77 | 1.86 | |
| CrowdStrike Holdings Inc. | 1.76 | 1.73 | 1.83 | 2.65 | 2.38 | |
| Datadog Inc. | 2.64 | 3.17 | 3.09 | 3.54 | 5.77 | |
| International Business Machines Corp. | 1.04 | 0.96 | 0.92 | 0.88 | 0.98 | |
| Intuit Inc. | 1.29 | 1.47 | 1.39 | 1.94 | 2.26 | |
| Microsoft Corp. | 1.27 | 1.77 | 1.78 | 2.08 | 2.52 | |
| Oracle Corp. | 0.72 | 0.91 | 1.62 | 2.30 | 3.03 | |
| Palo Alto Networks Inc. | 0.89 | 0.78 | 0.77 | 0.91 | 1.91 | |
| Salesforce Inc. | 1.09 | 1.02 | 1.05 | 1.23 | 1.08 | |
| ServiceNow Inc. | 1.10 | 1.06 | 1.11 | 1.05 | 1.21 | |
| Synopsys Inc. | 2.44 | 1.15 | 1.09 | 1.16 | 1.19 | |
| Workday Inc. | 1.97 | 1.75 | 1.03 | 1.12 | 1.04 | |
| Current Ratio, Sector | ||||||
| Software & Services | 1.20 | 1.40 | 1.44 | 1.69 | — | |
| Current Ratio, Industry | ||||||
| Information Technology | 1.24 | 1.41 | 1.37 | 1.55 | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 5,934,289 ÷ 996,018 = 5.96
2 Click competitor name to see calculations.
The current ratio demonstrates a consistent upward trend over the five-year period. This indicates a strengthening ability to cover short-term obligations with short-term assets.
- Current Ratio Trend
- The current ratio increased from 3.74 in 2020 to 5.96 in 2024. This represents a 59.9% increase over the period.
- Year-over-Year Changes
- From 2020 to 2021, the current ratio increased by 15.8%, moving from 3.74 to 4.34. The increase from 2021 to 2022 was 19.2%, with the ratio reaching 5.17. A further increase of 7.3% was observed between 2022 and 2023, bringing the ratio to 5.55. The most recent year, 2024, saw an increase of 7.4%, culminating in a ratio of 5.96.
- Underlying Components
- Both current assets and current liabilities have increased over the period. However, the growth in current assets has consistently outpaced the growth in current liabilities, driving the improvement in the current ratio. Current assets increased from US$2,257,429 thousand in 2020 to US$5,934,289 thousand in 2024, while current liabilities rose from US$603,823 thousand to US$996,018 thousand over the same timeframe.
- Implications
- A consistently increasing current ratio generally suggests improved liquidity and a reduced risk of short-term financial distress. The company appears increasingly capable of meeting its immediate obligations. However, a very high current ratio could also indicate inefficient utilization of current assets.
Quick Ratio
Palantir Technologies Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 2,098,524) | 831,047) | 2,598,540) | 2,290,674) | 2,011,323) | |
| Marketable securities | 3,131,463) | 2,843,132) | 35,135) | 234,153) | —) | |
| Accounts receivable, net | 575,048) | 364,784) | 258,346) | 190,923) | 156,932) | |
| Total quick assets | 5,805,035) | 4,038,963) | 2,892,021) | 2,715,750) | 2,168,255) | |
| Current liabilities | 996,018) | 746,018) | 587,941) | 660,061) | 603,823) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 5.83 | 5.41 | 4.92 | 4.11 | 3.59 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Accenture PLC | 0.98 | 1.18 | 1.12 | 1.14 | 1.29 | |
| Adobe Inc. | 0.95 | 1.22 | 1.00 | 1.11 | 1.34 | |
| AppLovin Corp. | 2.04 | 1.54 | 3.08 | 4.82 | — | |
| Cadence Design Systems Inc. | 2.53 | 1.02 | 1.02 | 1.47 | 1.60 | |
| CrowdStrike Holdings Inc. | 1.60 | 1.58 | 1.68 | 2.50 | 2.18 | |
| Datadog Inc. | 2.57 | 3.08 | 3.01 | 3.45 | 5.64 | |
| International Business Machines Corp. | 0.90 | 0.82 | 0.76 | 0.69 | 0.83 | |
| Intuit Inc. | 0.71 | 1.25 | 1.17 | 1.65 | 2.04 | |
| Microsoft Corp. | 1.06 | 1.54 | 1.57 | 1.90 | 2.33 | |
| Oracle Corp. | 0.59 | 0.74 | 1.43 | 2.15 | 2.83 | |
| Palo Alto Networks Inc. | 0.82 | 0.72 | 0.75 | 0.88 | 1.85 | |
| Salesforce Inc. | 0.96 | 0.90 | 0.93 | 1.11 | 0.95 | |
| ServiceNow Inc. | 1.02 | 1.00 | 1.06 | 1.01 | 1.16 | |
| Synopsys Inc. | 1.88 | 0.85 | 0.85 | 0.89 | 0.94 | |
| Workday Inc. | 1.87 | 1.66 | 0.96 | 1.07 | 0.95 | |
| Quick Ratio, Sector | ||||||
| Software & Services | 1.02 | 1.22 | 1.27 | 1.53 | — | |
| Quick Ratio, Industry | ||||||
| Information Technology | 0.96 | 1.12 | 1.09 | 1.30 | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 5,805,035 ÷ 996,018 = 5.83
2 Click competitor name to see calculations.
- Total quick assets
- The total quick assets have shown a consistent upward trend over the five-year period. Starting at approximately $2.17 billion in 2020, this figure increased steadily each year, reaching about $5.81 billion by the end of 2024. This significant growth reflects an enhancement in the company's liquid assets, suggesting improved liquidity and potentially greater financial flexibility.
- Current liabilities
- Current liabilities have experienced some fluctuations but with an overall increasing pattern. The amount rose slightly from $603.8 million in 2020 to $660.1 million in 2021, then decreased to $587.9 million in 2022. Subsequently, liabilities increased again to $746.0 million in 2023 and further to $996.0 million in 2024. Despite the dip in 2022, the liabilities grew substantially by 2024, indicating a rising short-term obligation load.
- Quick ratio
- The quick ratio, representing the company's ability to meet short-term liabilities with its most liquid assets, has improved consistently from 3.59 in 2020 to 5.83 in 2024. This upward trend aligns with the growth in quick assets outpacing the increase in current liabilities. The rising quick ratio indicates strengthening liquidity and enhanced short-term financial health.
Cash Ratio
Palantir Technologies Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 2,098,524) | 831,047) | 2,598,540) | 2,290,674) | 2,011,323) | |
| Marketable securities | 3,131,463) | 2,843,132) | 35,135) | 234,153) | —) | |
| Total cash assets | 5,229,987) | 3,674,179) | 2,633,675) | 2,524,827) | 2,011,323) | |
| Current liabilities | 996,018) | 746,018) | 587,941) | 660,061) | 603,823) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 5.25 | 4.93 | 4.48 | 3.83 | 3.33 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Accenture PLC | 0.26 | 0.50 | 0.45 | 0.52 | 0.67 | |
| Adobe Inc. | 0.75 | 0.95 | 0.75 | 0.84 | 1.09 | |
| AppLovin Corp. | 0.70 | 0.53 | 1.87 | 4.02 | — | |
| Cadence Design Systems Inc. | 2.03 | 0.72 | 0.66 | 1.13 | 1.17 | |
| CrowdStrike Holdings Inc. | 1.29 | 1.28 | 1.42 | 2.22 | 1.85 | |
| Datadog Inc. | 2.25 | 2.58 | 2.48 | 2.94 | 5.09 | |
| International Business Machines Corp. | 0.45 | 0.39 | 0.28 | 0.22 | 0.36 | |
| Intuit Inc. | 0.54 | 0.97 | 0.90 | 1.46 | 2.00 | |
| Microsoft Corp. | 0.60 | 1.07 | 1.10 | 1.47 | 1.89 | |
| Oracle Corp. | 0.34 | 0.44 | 1.12 | 1.93 | 2.50 | |
| Palo Alto Networks Inc. | 0.34 | 0.31 | 0.44 | 0.57 | 1.39 | |
| Salesforce Inc. | 0.53 | 0.48 | 0.48 | 0.67 | 0.54 | |
| ServiceNow Inc. | 0.69 | 0.66 | 0.71 | 0.67 | 0.83 | |
| Synopsys Inc. | 1.53 | 0.53 | 0.56 | 0.65 | 0.58 | |
| Workday Inc. | 1.55 | 1.32 | 0.72 | 0.83 | 0.65 | |
| Cash Ratio, Sector | ||||||
| Software & Services | 0.59 | 0.79 | 0.83 | 1.12 | — | |
| Cash Ratio, Industry | ||||||
| Information Technology | 0.57 | 0.71 | 0.67 | 0.89 | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 5,229,987 ÷ 996,018 = 5.25
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets of the company demonstrate a consistent upward trend from 2020 to 2024. Beginning at approximately 2.01 billion US dollars in 2020, cash reserves increased steadily each year, reaching around 5.23 billion US dollars by the end of 2024. This growth indicates a strengthening liquidity position and suggests improved cash generation capabilities or capital inflows over the period.
- Current liabilities
- Current liabilities show some fluctuations across the five-year span. After an initial increase from roughly 604 million US dollars in 2020 to 660 million in 2021, liabilities decreased to about 588 million in 2022. However, this was followed by a rise again in 2023 and 2024, ultimately reaching nearly 1 billion US dollars by the end of 2024. The overall pattern suggests variability in short-term obligations, with a pronounced increase in the most recent years, potentially reflecting operational scaling or increased short-term financing.
- Cash ratio
- The cash ratio, measuring the company's ability to cover current liabilities with cash and cash equivalents, consistently improved over the analyzed period. Starting at 3.33 in 2020, the ratio rose each year and reached 5.25 by 2024. This persistent increase indicates an enhanced capacity to meet short-term obligations solely through cash assets, signifying a conservative liquidity strategy or accumulation of liquid resources relative to liabilities.
- Overall analysis
- The company exhibits a strong and increasing liquidity position, with cash assets growing substantially and outpacing the rise in current liabilities. While liabilities showed some year-to-year variability, the steady increase in cash assets led to an improving cash ratio, reinforcing financial flexibility. This trend suggests that the company is managing its resources conservatively, possibly preparing for future investments or mitigating risk associated with short-term obligations.