ServiceNow Inc. (NYSE:NOW)

Current Ratio

The current ratio exhibits a general upward trend from March 2020 through September 2020, peaking at 1.40. This is followed by some fluctuations in subsequent quarters, generally stabilizing around values slightly above 1.0. The ratio experiences modest decreases around mid-2023 but recovers somewhat by the end of 2024, remaining consistently above 1.0. This indicates that the company has maintained a stable ability to cover its short-term liabilities with current assets across the evaluation period, though with some variability.

Quick Ratio

The quick ratio closely parallels the trend of the current ratio, starting at 0.98 in March 2020 and increasing to a peak of 1.33 by September 2020. Afterward, it fluctuates between approximately 1.00 and 1.17, showing some minor volatility but staying near the threshold of liquidity adequacy. Slight declines are observable in late 2023 and mid-2024, where it dips close to 1.0 or slightly below. This pattern suggests that the company’s liquid assets, excluding inventory, have been sufficient to meet immediate liabilities, with a generally sound liquidity position throughout the periods.

Cash Ratio

The cash ratio shows more pronounced variability over time. It starts at 0.68 in March 2020, rising notably to a peak of 1.04 in September 2020, indicating substantial cash and cash equivalents relative to current liabilities during that quarter. Subsequent periods witness declines and rebounds, with values typically fluctuating between about 0.66 and 0.89. The ratio notably decreases toward the end of 2023 and remains below 0.80 in most quarters following that period. This suggests less cash cushion relative to current obligations compared to earlier periods, pointing to a somewhat tighter liquidity position when measured strictly by cash and equivalents.

Overall Analysis

Across all three liquidity measures, the data reflects the company’s ability to manage short-term obligations relatively well, maintaining ratios generally above 1.0 for current and quick ratios, and above 0.5 for the cash ratio. The initial peak in late 2020 may correspond to a period of increased liquidity or asset accumulation. Subsequent fluctuations signify normal operational variability rather than major liquidity concerns. However, the downward adjustments seen in late 2023 and into 2024 suggest closer monitoring of cash availability is advisable, despite the current ratios not indicating immediate risk. The trends point toward a liquidity profile that is stable but with some sensitivity to changes in cash holdings over time.

The analysis of the quarterly financial data over the observed periods reveals several noteworthy trends related to liquidity and asset-liability management.

Current Assets

The current assets exhibited a general upward trajectory from March 31, 2020, through June 30, 2025. Starting at approximately 2,806 million US dollars, current assets increased steadily, peaking around the fourth quarter of 2024 and early 2025 with values exceeding 9,000 million US dollars. Although minor fluctuations appeared in some quarters, such as slight decreases between March 2021 and June 2021 and again between June 2023 and September 2023, the overall trend indicated growth in liquid and short-term resources over the analyzed timeframe.

Current Liabilities

Current liabilities also rose substantially during the same period, beginning close to 2,721 million US dollars and reaching upward of roughly 8,500 million US dollars by mid-2025. Similar to current assets, these liabilities showed some quarter-to-quarter variations, including notable increases in the fourth quarters of 2020, 2021, and 2023. The consistent increase in current liabilities alongside current assets suggests an expansion in operational scale, though it may also point to rising short-term obligations.

Current Ratio

The current ratio fluctuated moderately between 1.03 and 1.40 throughout the reporting periods. Initial readings around 1.03 in early 2020 increased to as high as 1.40 in the third quarter of 2020, indicating improved short-term liquidity at that time. However, from late 2020 onward, the ratio stabilized mostly between 1.05 and 1.17, reflecting relatively consistent liquidity positions. Slight declines in the current ratio in certain quarters, notably near the end of 2021 and mid-2023, signify periods where current liabilities grew closer to or outpaced current assets, but values generally remained above 1.0, indicating an adequate ability to cover short-term obligations with current assets.

In summary, there is clear evidence of increasing scale in both current assets and liabilities over the examined timeframe. The company maintained a relatively stable and sufficient current ratio, with no prolonged periods of liquidity risk evident. The data suggests prudent management of working capital with a balanced approach towards asset and liability growth.

The analysis of the quarterly financial data reveals several notable trends related to the liquidity position over the examined periods.

Total Quick Assets

Total quick assets demonstrate a generally upward trend from March 31, 2020, through June 30, 2025. Starting at approximately $2,657 million, quick assets increased with some fluctuations, reaching a peak around December 31, 2024, with values exceeding $8,500 million. Despite intermittent declines—particularly noticeable in the last quarters of 2023 and parts of 2024—the overall trajectory is positive, indicating growth in liquid assets available to cover immediate liabilities.

Current Liabilities

Current liabilities also show an increasing pattern over the same period, starting near $2,721 million and rising to about $8,495 million by June 30, 2025. There are fluctuations in liabilities, with some quarters showing decreases (e.g., the decline from December 31, 2020, to March 31, 2021) but the general trend indicates a rising level of short-term obligations. The increase in liabilities somewhat parallels the growth in quick assets, suggesting proportional changes in working capital components.

Quick Ratio

The quick ratio, which is a measure of short-term liquidity, illustrates variability but remains relatively stable within a narrow range, mostly oscillating between approximately 0.98 and 1.19. Initially, the ratio improved from under 1 in early 2020 to peak above 1.1 during mid-2020 and early 2021, before settling close to 1 in subsequent periods. By the final reported quarters, the ratio hovers around 1.0, indicating that quick assets approximately match current liabilities. This stability suggests the company maintains a consistent ability to meet short-term obligations, despite fluctuations in asset and liability balances.

In summary, the company has experienced growth in liquid assets and current liabilities over the analyzed periods. The quick ratio stability near the benchmark of 1 implies a maintained equilibrium between liquid resources and immediate liabilities, reflecting cautious liquidity management amid expanding operational scale. Periodic fluctuations in this ratio highlight transient variations in liquidity but do not suggest significant risk of short-term financial distress within the observed timeframe.

The analysis of the quarterly financial data reveals several notable trends in the company's cash assets, current liabilities, and liquidity ratio over the periods observed.

Total Cash Assets

The total cash assets exhibit a general upward trend from March 31, 2020, through June 30, 2025. Beginning at 1,859 million USD in early 2020, the cash assets increased with some fluctuations, reaching peaks at several intervals such as 4,877 million USD at the end of 2023 and 6,597 million USD by March 31, 2025. After slight declines within some quarters, the overall trend indicates a growing cash reserve, reflecting the company's ability to accumulate liquid resources over time.

Current Liabilities

Current liabilities have shown a steady increase across the periods, starting from 2,721 million USD in the first quarter of 2020 to significantly higher levels exceeding 8,000 million USD by mid-2025. The data reveal some volatility within quarters, with sudden rises, particularly evident at the end of 2021 and subsequent quarters. The increase in current liabilities suggests higher short-term financial obligations, which may be connected to business expansion or operational financing needs.

Cash Ratio

The cash ratio, a measure of liquidity indicating the firm’s ability to cover short-term liabilities with cash assets, fluctuates within a narrow range from 0.66 to 1.04 throughout the period. It peaked above 1.0 in September 2020, indicating that cash assets momentarily surpassed current liabilities. However, the ratio mostly remains below 1.0, often around 0.7 to 0.8, signaling that while cash coverage is substantial, current liabilities exceed cash assets consistently. The lowest points appear at the end of 2023 and during 2025, implying a relatively weaker cash position to cover immediate obligations despite increasing cash levels.

Overall, the data presents an expanding balance sheet with increasing cash assets parallel to rising current liabilities, while liquidity as measured by the cash ratio remains somewhat constrained, never sustaining a level above 1 for an extended period. This pattern suggests that although the company is growing its cash reserves, its short-term financial commitments are rising concurrently, maintaining pressure on liquidity management.