Accenture PLC (NYSE:ACN)

The analysis of the liquidity ratios over the reported periods indicates varying trends in the company's ability to meet its short-term obligations.

Current Ratio

The current ratio exhibits moderate fluctuations throughout the periods. Initially, it maintains a relatively stable range around 1.38 to 1.45 from November 2019 through November 2020. A slight decline is observed in the subsequent quarters, reaching a low near 1.10 by February 2025. Notably, there is an upward reversal in the later quarters, climaxing at 1.48 before a minor decrease to 1.42 in August 2025. This pattern suggests a generally stable liquidity position with short periods of softness, followed by recovery.

Quick Ratio

The quick ratio trends similarly to the current ratio but remains consistently lower, reflecting the exclusion of inventory from liquid assets. It starts about 1.28 and declines to a low near 0.98 around February 2025. Subsequently, it rebounds significantly to approximately 1.33 before a slight dip towards the end of the observed period. The quick ratio's dip below one during some quarters implies potential reliance on less liquid current assets; however, the rebound signifies an improvement in immediate liquidity.

Cash Ratio

The cash ratio displays the most variability, starting around 0.52 and peaking temporarily near 0.68 in late 2020. Following this, it declines steadily to a low point near 0.26 by February 2025, indicating reduced availability of cash and cash equivalents relative to current liabilities. Thereafter, the ratio recovers moderately, reaching 0.56 by August 2025. This volatility suggests fluctuating cash reserves, which may be linked to company cash management practices or operational cash flow variability.

Overall, the liquidity ratios reflect a company managing its short-term assets and liabilities with some periods of tightening liquidity, particularly visible in the cash ratio. The partial recovery in all three ratios toward the latter part of the timeline indicates concerted efforts to strengthen liquidity. Attention should be given to the declining trends observed during early 2024 through early 2025, which may warrant further scrutiny to mitigate potential liquidity risk.

The analysis of the quarterly financial data reveals several notable trends regarding the liquidity position of the company over the observed periods.

Current Assets

The current assets exhibit a general upward trend from late 2019 through mid-2021, increasing from approximately $15.6 billion to over $21 billion. This upward momentum shows some fluctuations thereafter, with values slightly declining towards early 2024 but rebounding strongly to reach nearly $29 billion by late 2025. Such growth indicates an overall strengthening of the company's liquid resources available for meeting short-term obligations across the medium term.

Current Liabilities

Current liabilities also show a consistent increase over the same timeframe, growing from roughly $11.2 billion in late 2019 to above $20 billion by the end of the data series in 2025. The steady rise in liabilities suggests an increasing level of short-term financial commitments, which may reflect business expansion or higher operational activities requiring additional working capital funding.

Current Ratio

The current ratio remains relatively stable throughout the periods, oscillating between 1.1 and 1.48. Initially, the ratio hovered around 1.39 to 1.45 in 2019-2020, then dipped to a low of approximately 1.1 by late 2024, indicating a tighter liquidity position during that interval. However, by mid to late 2025, the current ratio improved again to around 1.4 to 1.48, signaling an enhancement in the coverage of current liabilities by current assets. Maintaining a current ratio above 1 across most periods reflects a generally adequate liquidity buffer, though the intermittent declines warrant attention for potential liquidity risks during certain quarters.

In summary, both current assets and liabilities have grown substantially over the analyzed period, with assets generally outpacing liabilities to sustain a stable current ratio. Fluctuations in the current ratio indicate some variability in liquidity management, but the overall trend suggests the company's capability to meet its short-term liabilities remains adequate with an improving outlook towards the end of the data horizon.

Trend in Total Quick Assets

The total quick assets exhibited a generally increasing trend over the analyzed periods. Starting from approximately 14.4 billion USD, values fluctuated, reaching peaks beyond 26 billion USD in the latest periods. Temporary declines were observed at certain points, such as between August 2021 and February 2024, but the overall trajectory indicates growth in liquid assets available.

Trend in Current Liabilities

Current liabilities also increased progressively over the periods, starting near 11.2 billion USD and rising to over 20 billion USD in the latest quarters. Similar to quick assets, there were fluctuations with occasional short-term decreases, but the general trend is upward, reflecting a rise in short-term obligations.

Analysis of Quick Ratio

The quick ratio showed variability but remained close to or above 1.0 for most periods, indicating the company's ability to cover current liabilities with its liquid assets. Specifically, the quick ratio started at 1.28, declined moderately to values slightly above 1.0 between late 2021 and early 2024, and then increased again to values above 1.3 in the last observed quarters. A brief period with a ratio just below 1.0 was noted around February and August 2024, potentially signaling tighter liquidity.

Implications of Financial Ratios and Values

The parallel increase in both quick assets and current liabilities suggests that the company is expanding its short-term financial activities, possibly reflecting growth or increased operational scale. The maintenance of a quick ratio generally exceeding 1.0 indicates prudent liquidity management, ensuring that liquid assets sufficiently cover immediate obligations. The dip in the quick ratio below 1.0 during some quarters warrants monitoring but appears to be temporary as the ratio rebounds subsequently.

Overall Summary

The data reveals a pattern of gradual growth in short-term assets and liabilities, with the company maintaining acceptable liquidity levels throughout the periods. Occasional fluctuations in the quick ratio point to varying liquidity pressure but no sustained risk to the company's ability to meet short-term liabilities with liquid assets. The general financial health in terms of quick assets and liabilities appears stable with an underlying growth trend.

Total Cash Assets

The total cash assets exhibited notable fluctuations throughout the reported periods. Initially, there was a decline from approximately 5.8 billion to 5.4 billion US dollars between late 2019 and early 2020. This was followed by a recovery and growth phase peaking at around 10 billion US dollars in mid-2021. Subsequent quarters showed variability, with cash assets generally declining until early 2024, reaching a trough just above 5 billion US dollars. From that point onwards, there was a sustained recovery with a progressive increase, culminating in the highest recorded level of approximately 11.5 billion US dollars in late 2025. This pattern suggests significant cash management activity, possibly reflecting operational cash flow variability or strategic liquidity adjustments.

Current Liabilities

Current liabilities displayed a persistent upward trajectory over the entire timeline. Beginning at roughly 11.2 billion US dollars in late 2019, there was a consistent increase, reaching a peak of about 20.4 billion US dollars by late 2025. Although there were minor fluctuations in certain quarters, the overall trend indicates growing obligations, which may reflect business expansion, increased short-term borrowings, or rising operational costs.

Cash Ratio

The cash ratio, a measure of liquidity representing cash assets relative to current liabilities, exhibited a generally declining trend over the observed periods with some intermittent improvements. Initially, the ratio was moderate at around 0.52 in late 2019, improved to a peak of 0.68 in late 2020, and maintained relatively higher values near 0.65-0.67 into mid-2021. From late 2021 for several quarters, the ratio decreased markedly, reaching a low point of approximately 0.26 by late 2024, indicating a reduction in short-term liquidity relative to obligations. However, subsequent quarters showed recovery, with the ratio increasing back above 0.5 by late 2025. This indicates a period of lower liquidity relative to current liabilities during 2022-2024, followed by efforts to restore liquidity buffers.

Overall Insights

The financial data reveal that despite rising current liabilities over time, the company has managed to maintain sufficient cash assets to support liquidity, as evidenced by the fluctuating but ultimately recovering cash ratio. The increasing current liabilities may warrant monitoring to ensure sustainable debt levels. The variability in cash assets and liquidity ratios suggests active financial management in response to market or operational conditions to maintain solvency and operational flexibility.