Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Statement of Comprehensive Income
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2013
- Return on Assets (ROA) since 2013
- Total Asset Turnover since 2013
- Price to Operating Profit (P/OP) since 2013
- Price to Sales (P/S) since 2013
- Analysis of Debt
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Liquidity Ratios (Summary)
Workday Inc., liquidity ratios
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Current ratio | |||||||
| Quick ratio | |||||||
| Cash ratio |
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
- Current Ratio
- The current ratio exhibited slight fluctuations between the years 2020 and 2022, starting at 1.04 in 2020, rising modestly to 1.12 in 2021, and then decreasing to 1.03 in 2022. However, a significant improvement is noted in 2023 and 2024, with the ratio increasing sharply to 1.75 and then 1.97, respectively. In 2025, it marginally declined to 1.9, yet remains substantially higher compared to earlier years. This indicates an overall strengthening in the company's ability to cover short-term obligations with current assets during the latter part of the period.
- Quick Ratio
- The quick ratio follows a similar trend as the current ratio. It started at 0.95 in 2020, rose to 1.07 in 2021, and decreased slightly to 0.96 in 2022. A marked increase is evident in 2023 and 2024 to 1.66 and 1.87, respectively, before a modest decline to 1.8 in 2025. This pattern demonstrates an enhanced financial liquidity position when excluding inventory, particularly from 2023 onward, reflecting improved short-term financial health.
- Cash Ratio
- The cash ratio remained below 1 in the initial three years, starting at 0.65 in 2020, increasing to 0.83 in 2021, then decreasing to 0.72 in 2022. A notable rise occurs in 2023 to 1.32 and continues upward to reach 1.55 in 2024, before a slight decrease to 1.45 in 2025. This suggests a growing ability to meet short-term liabilities using the most liquid assets, especially in the last three years, reinforcing the company's improving liquidity position.
Current Ratio
Workday Inc., current ratio calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| 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. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
| Current Ratio, Sector | |||||||
| Software & Services | |||||||
| Current Ratio, Industry | |||||||
| Information Technology | |||||||
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets displayed a consistent upward trend over the period analyzed, increasing from 3,095 million US dollars in 2020 to 10,545 million US dollars in 2025. This represents a more than threefold growth, indicating a significant accumulation of liquid and short-term assets over time.
- Current Liabilities
- Current liabilities also increased but at a different pace. Starting at 2,969 million US dollars in 2020, they rose to 5,548 million US dollars in 2025. The increase is substantial but notably less pronounced than the growth in current assets.
- Current Ratio
- The current ratio remained relatively stable around 1.0 to 1.12 from 2020 through 2022, indicating a balanced relationship between current assets and liabilities during these years. A marked improvement began in 2023, with the ratio rising sharply to 1.75 and further peaking at 1.97 in 2024, before slightly declining to 1.90 in 2025. This suggests enhanced liquidity and a stronger short-term financial position in the later years analyzed.
- Overall Analysis
- The data evidences a strategic improvement in liquidity management, with current assets growing significantly faster than current liabilities. The sharp improvement in the current ratio from 2023 onward indicates a more conservative or improved working capital position, potentially reducing liquidity risk. Despite the slight decrease in the ratio in the final year, the company maintains a robust liquidity cushion compared to earlier years.
Quick Ratio
Workday Inc., quick ratio calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | |||||||
| Marketable securities | |||||||
| Trade and other receivables, net of allowance for credit losses | |||||||
| 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. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
| Quick Ratio, Sector | |||||||
| Software & Services | |||||||
| Quick Ratio, Industry | |||||||
| Information Technology | |||||||
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibit a consistent upward trend over the analyzed period. Starting at 2,822 million US dollars in 2020, they increased significantly to 9,967 million US dollars by 2025. Notably, the most substantial increments appear between 2021 and 2023, with a growth from 4,568 to 7,691 million US dollars, indicating an enhanced liquidity position that could support short-term obligations.
- Current Liabilities
- Current liabilities showed a generally increasing trend from 2,969 million US dollars in 2020 to 5,548 million US dollars in 2025. A peak was observed in 2022 at 5,068 million, followed by a slight decline in 2023 to 4,628 million before rising again in subsequent years. This fluctuation suggests variability in short-term obligations, possibly due to changing operational or financing activities.
- Quick Ratio
- The quick ratio improved notably over the period, starting below parity at 0.95 in 2020 and rising to a peak of 1.87 in 2024 before slightly declining to 1.8 in 2025. This overall increase indicates an enhancement in the company's ability to cover current liabilities with its most liquid assets. The ratio surpassing 1.0 from 2021 onward reflects improved short-term financial health and liquidity management.
- Summary and Insights
- The combined trends of increasing total quick assets and a relatively stable but moderately rising level of current liabilities contribute to the strengthening quick ratio. This suggests a systematic improvement in liquidity and implies a more conservative or effective approach to managing short-term financial obligations. The temporary dip in current liabilities in 2023 might represent a strategic reduction in short-term debt or other liabilities, while the increased quick assets reinforce the company's readiness to meet immediate demands. Overall, the financial data reveals a positive trajectory in liquidity and short-term financial stability throughout the reviewed period.
Cash Ratio
Workday Inc., cash ratio calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | |||||||
| Marketable securities | |||||||
| 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. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
| Cash Ratio, Sector | |||||||
| Software & Services | |||||||
| Cash Ratio, Industry | |||||||
| Information Technology | |||||||
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited a consistent upward trend over the examined periods, increasing from 1,945 million US dollars in January 2020 to 8,017 million US dollars in January 2025. This represents a more than fourfold growth, with notable acceleration between January 2022 and January 2023 where the cash assets rose significantly from 3,644 million to 6,121 million US dollars. This trend indicates a strengthening cash position over time.
- Current Liabilities
- Current liabilities also increased throughout the period, from 2,969 million US dollars in January 2020 to 5,548 million US dollars in January 2025. The growth was relatively steady, though there was a slight decrease between January 2022 and January 2023, dropping from 5,068 million to 4,628 million US dollars, before rising again in subsequent periods. This suggests some variability but an overall upward trend in short-term obligations.
- Cash Ratio
- The cash ratio demonstrated significant improvement, rising from 0.65 in January 2020 to a peak of 1.55 in January 2024, before a slight decrease to 1.45 in January 2025. The ratio remained below 1.0 in the initial three years, indicating that cash assets were initially insufficient to cover current liabilities. However, from January 2023 onward, the cash ratio exceeded 1.0, reflecting a stronger liquidity position with sufficient cash to cover short-term liabilities.
- Overall Analysis
- The data reveals strengthening liquidity over the period analyzed, driven by substantial growth in cash reserves outpacing the rise in current liabilities. The improvement in the cash ratio from below 1.0 to above 1.0 reflects a shift towards a more conservative liquidity stance. This enhanced liquidity provides greater flexibility in meeting short-term liabilities and may indicate improved financial stability and operational cash flow management.