Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Based on: 10-K (reporting date: 2024-08-31), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-08-31), 10-K (reporting date: 2021-08-31), 10-K (reporting date: 2020-08-31), 10-K (reporting date: 2019-08-31).
- Current Ratio
- The current ratio remained stable at 1.4 for the two-year period ending in 2020, indicating consistent short-term liquidity. It then declined to 1.25 in 2021 and slightly further to 1.23 in 2022, reflecting a mild decrease in current assets relative to current liabilities. Although there was a modest recovery to 1.3 in 2023, the ratio fell again to 1.1 in 2024. The overall trend suggests a gradual reduction in the buffer available to cover short-term obligations, potentially signaling tighter liquidity conditions in recent years.
- Quick Ratio
- The quick ratio followed a similar pattern, holding steady at 1.29 in 2019 and 2020 before declining to 1.14 in 2021 and 1.12 in 2022. There was a slight improvement to 1.18 in 2023; however, a notable drop to 0.98 occurred in 2024. This indicates a reduced ability to cover immediate liabilities without relying on inventory, which may imply increased reliance on less liquid current assets or higher current liabilities.
- Cash Ratio
- The cash ratio showed more volatility, beginning at 0.55 in 2019 and increasing to a peak of 0.67 in 2020. Subsequently, it declined to 0.52 in 2021 and continued downward to 0.45 in 2022. There was a minor recovery to 0.5 in 2023, followed by a significant decline to 0.26 in 2024. This sharp drop in 2024 suggests a considerable reduction in the most liquid assets held, thus weakening the firm's immediate liquidity position and its ability to cover current liabilities strictly with cash and cash equivalents.
- Summary
- The liquidity indicators collectively depict a trend toward decreasing short-term financial flexibility over the observed period, notably in the most recent year. Both broad and narrow measures of liquidity (current and quick ratios) have diminished moderately, while the cash ratio's sharp fall in the latest period raises concerns about cash availability. The firm may need to monitor its working capital management closely to maintain sufficient liquidity levels to meet short-term obligations.
Current Ratio
Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Current assets | 20,857,781) | 23,381,931) | 21,610,871) | 19,666,511) | 17,749,756) | 15,450,601) | |
Current liabilities | 18,976,127) | 18,009,038) | 17,523,496) | 15,708,867) | 12,662,590) | 11,061,896) | |
Liquidity Ratio | |||||||
Current ratio1 | 1.10 | 1.30 | 1.23 | 1.25 | 1.40 | 1.40 | |
Benchmarks | |||||||
Current Ratio, Competitors2 | |||||||
Adobe Inc. | 1.07 | 1.34 | 1.11 | 1.25 | 1.48 | 0.79 | |
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 | — | |
Fair Isaac Corp. | 1.62 | 1.51 | 1.46 | 0.99 | 1.29 | 0.93 | |
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 | 1.83 | |
Microsoft Corp. | 1.27 | 1.77 | 1.78 | 2.08 | 2.52 | 2.53 | |
Oracle Corp. | 0.72 | 0.91 | 1.62 | 2.30 | 3.03 | — | |
Palantir Technologies Inc. | 5.96 | 5.55 | 5.17 | 4.34 | 3.74 | — | |
Palo Alto Networks Inc. | 0.89 | 0.78 | 0.77 | 0.91 | 1.91 | 1.78 | |
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 | 0.99 | |
Workday Inc. | 1.97 | 1.75 | 1.03 | 1.12 | 1.04 | — | |
Current Ratio, Sector | |||||||
Software & Services | 1.19 | 1.39 | 1.43 | 1.67 | 1.91 | — | |
Current Ratio, Industry | |||||||
Information Technology | 1.24 | 1.41 | 1.37 | 1.55 | 1.71 | — |
Based on: 10-K (reporting date: 2024-08-31), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-08-31), 10-K (reporting date: 2021-08-31), 10-K (reporting date: 2020-08-31), 10-K (reporting date: 2019-08-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 20,857,781 ÷ 18,976,127 = 1.10
2 Click competitor name to see calculations.
- Current Assets
- Current assets demonstrate a steady increase from August 31, 2019, through August 31, 2023, rising from approximately 15.45 billion US dollars to 23.38 billion US dollars. This represents a consistent upward trend over five years. However, in the latest observation at August 31, 2024, current assets show a decrease to about 20.86 billion US dollars, indicating a downward adjustment after a period of growth.
- Current Liabilities
- Current liabilities have exhibited a continuous upward trajectory throughout the entire period. Starting from around 11.06 billion US dollars in 2019, liabilities increased every year, reaching approximately 18.98 billion US dollars by August 31, 2024. This consistent rise suggests an increasing obligation burden over time.
- Current Ratio
- The current ratio, representing liquidity, remained stable at 1.4 in both 2019 and 2020, then declined to 1.25 in 2021 and slightly decreased further to 1.23 in 2022. A mild recovery to 1.3 was observed in 2023, but the ratio dropped noticeably to 1.1 by 2024. This overall decline in the current ratio indicates a weakening liquidity position in the most recent year, potentially due to the decreasing current assets combined with increasing current liabilities.
- Summary
- Overall, the financial data reflects an increasing trend in both current assets and liabilities over the majority of the observed timeframe, with current liabilities rising at a somewhat faster pace than assets in recent years. The decline in the liquidity ratio in the latest year suggests that the company’s ability to cover short-term obligations with short-term assets has weakened, signaling a potential area for attention in liquidity management.
Quick Ratio
Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Cash and cash equivalents | 5,004,469) | 9,045,032) | 7,889,833) | 8,168,174) | 8,415,330) | 6,126,853) | |
Short-term investments | 5,396) | 4,575) | 3,973) | 4,294) | 94,309) | 3,313) | |
Receivables | 11,873,442) | 10,690,713) | 10,484,211) | 8,796,992) | 7,192,110) | 7,467,338) | |
Contract assets, current | 1,791,405) | 1,536,473) | 1,292,564) | 931,220) | 654,782) | 627,733) | |
Total quick assets | 18,674,712) | 21,276,793) | 19,670,581) | 17,900,680) | 16,356,531) | 14,225,237) | |
Current liabilities | 18,976,127) | 18,009,038) | 17,523,496) | 15,708,867) | 12,662,590) | 11,061,896) | |
Liquidity Ratio | |||||||
Quick ratio1 | 0.98 | 1.18 | 1.12 | 1.14 | 1.29 | 1.29 | |
Benchmarks | |||||||
Quick Ratio, Competitors2 | |||||||
Adobe Inc. | 0.95 | 1.22 | 1.00 | 1.11 | 1.34 | 0.70 | |
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 | — | |
Fair Isaac Corp. | 1.52 | 1.43 | 1.37 | 0.91 | 1.19 | 0.82 | |
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 | 1.44 | |
Microsoft Corp. | 1.06 | 1.54 | 1.57 | 1.90 | 2.33 | 2.35 | |
Oracle Corp. | 0.59 | 0.74 | 1.43 | 2.15 | 2.83 | — | |
Palantir Technologies Inc. | 5.83 | 5.41 | 4.92 | 4.11 | 3.59 | — | |
Palo Alto Networks Inc. | 0.82 | 0.72 | 0.75 | 0.88 | 1.85 | 1.72 | |
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 | 0.73 | |
Workday Inc. | 1.87 | 1.66 | 0.96 | 1.07 | 0.95 | — | |
Quick Ratio, Sector | |||||||
Software & Services | 1.00 | 1.21 | 1.26 | 1.51 | 1.75 | — | |
Quick Ratio, Industry | |||||||
Information Technology | 0.96 | 1.12 | 1.08 | 1.30 | 1.46 | — |
Based on: 10-K (reporting date: 2024-08-31), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-08-31), 10-K (reporting date: 2021-08-31), 10-K (reporting date: 2020-08-31), 10-K (reporting date: 2019-08-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 18,674,712 ÷ 18,976,127 = 0.98
2 Click competitor name to see calculations.
- Total quick assets
- The total quick assets demonstrate a generally increasing trend from 2019 through 2023, rising from approximately 14.2 billion USD to nearly 21.3 billion USD. This indicates a consistent accumulation of highly liquid assets over the initial five-year period. However, in 2024, a notable decline to about 18.7 billion USD is observed, suggesting a reduction in liquid asset holdings during the most recent year.
- Current liabilities
- Current liabilities exhibit a steady upward trajectory across the entire six-year span. Starting at roughly 11.1 billion USD in 2019, current liabilities increased each year, reaching approximately 18.9 billion USD by 2024. This continuous growth reflects rising short-term obligations over time, with the most significant increase occurring between 2022 and 2024.
- Quick ratio
- The quick ratio remained relatively stable at 1.29 in both 2019 and 2020, indicating strong liquidity relative to current liabilities at that time. From 2021 through 2023, the ratio declined slightly but hovered above 1.1, suggesting a modest erosion of immediate liquidity. In 2024, the quick ratio dropped below 1 to 0.98 for the first time in the period, implying that quick assets were slightly insufficient to cover current liabilities, signaling a potential liquidity concern.
Cash Ratio
Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Cash and cash equivalents | 5,004,469) | 9,045,032) | 7,889,833) | 8,168,174) | 8,415,330) | 6,126,853) | |
Short-term investments | 5,396) | 4,575) | 3,973) | 4,294) | 94,309) | 3,313) | |
Total cash assets | 5,009,865) | 9,049,607) | 7,893,806) | 8,172,468) | 8,509,639) | 6,130,166) | |
Current liabilities | 18,976,127) | 18,009,038) | 17,523,496) | 15,708,867) | 12,662,590) | 11,061,896) | |
Liquidity Ratio | |||||||
Cash ratio1 | 0.26 | 0.50 | 0.45 | 0.52 | 0.67 | 0.55 | |
Benchmarks | |||||||
Cash Ratio, Competitors2 | |||||||
Adobe Inc. | 0.75 | 0.95 | 0.75 | 0.84 | 1.09 | 0.51 | |
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 | — | |
Fair Isaac Corp. | 0.40 | 0.37 | 0.40 | 0.35 | 0.38 | 0.22 | |
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 | 1.39 | |
Microsoft Corp. | 0.60 | 1.07 | 1.10 | 1.47 | 1.89 | 1.93 | |
Oracle Corp. | 0.34 | 0.44 | 1.12 | 1.93 | 2.50 | — | |
Palantir Technologies Inc. | 5.25 | 4.93 | 4.48 | 3.83 | 3.33 | — | |
Palo Alto Networks Inc. | 0.34 | 0.31 | 0.44 | 0.57 | 1.39 | 1.37 | |
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 | 0.42 | |
Workday Inc. | 1.55 | 1.32 | 0.72 | 0.83 | 0.65 | — | |
Cash Ratio, Sector | |||||||
Software & Services | 0.58 | 0.78 | 0.82 | 1.11 | 1.32 | — | |
Cash Ratio, Industry | |||||||
Information Technology | 0.57 | 0.71 | 0.66 | 0.88 | 1.06 | — |
Based on: 10-K (reporting date: 2024-08-31), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-08-31), 10-K (reporting date: 2021-08-31), 10-K (reporting date: 2020-08-31), 10-K (reporting date: 2019-08-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 5,009,865 ÷ 18,976,127 = 0.26
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets showed an initial increase from 6,130,166 thousand in 2019 to a peak of 8,509,639 thousand in 2020. Subsequently, a decline is observed, with values dropping to 8,172,468 thousand in 2021, 7,893,806 thousand in 2022, followed by a recovery in 2023 to 9,049,607 thousand. However, in the most recent period of 2024, there is a significant decrease to 5,009,865 thousand.
- Current Liabilities
- Current liabilities have consistently increased across the periods, starting from 11,061,896 thousand in 2019 and rising steadily each year to reach 18,976,127 thousand by 2024. This represents a substantial incremental trend in short-term obligations over the six-year span.
- Cash Ratio
- The cash ratio, reflective of liquidity and the ability to cover current liabilities with cash and cash equivalents, peaked at 0.67 in 2020. Thereafter, it generally declined with minor fluctuations, decreasing from 0.52 in 2021 to 0.45 in 2022, then slightly improving to 0.50 in 2023 before a marked drop to 0.26 in 2024. This trend suggests a deterioration in liquidity relative to immediate liabilities in recent years.