ServiceNow Inc. (NYSE:NOW)

The analysis of the liquidity ratios over the examined periods reveals several notable trends.

Current Ratio

The current ratio fluctuated moderately throughout the observed quarters, generally staying slightly above 1.0. Starting at 1.23, it experienced a decrease to a low near 1.05 by the end of 2021, followed by intermittent rises and declines. The ratio peaked near 1.24 in late 2022 but then declined again, stabilizing around 1.06 to 1.12 in recent periods. This pattern indicates a consistent but modest level of current assets relative to current liabilities, suggesting the company maintained adequate short-term liquidity without significant variation.

Quick Ratio

The quick ratio mirrored the overall shape of the current ratio trend but remained slightly lower throughout the periods. Beginning at 1.19, it declined towards 1.01 by the close of 2021, showing a drop in more liquid assets relative to current liabilities. Although there were slight recoveries in some quarters, the ratio edged gradually downward in the latest periods, falling to below 1.0 by the final quarter observed. This indicates a slight decrease in highly liquid assets such as cash and receivables available to cover current liabilities instantly.

Cash Ratio

The cash ratio demonstrated a more pronounced volatility and a generally lower level relative to the other liquidity ratios. Initially at 0.94, it declined notably to 0.67 by the end of 2021, suggesting a reduction in cash and cash equivalents available. Partial rebounds occurred in 2022 and early 2023, yet the ratio again dipped below 0.7 in the latter observed quarters, settling near 0.69. This downward trend reflects a tightening in the company’s immediate cash holdings compared to its short-term liabilities.

Overall, the company maintained a stable but modest liquidity position. While the current ratio consistently remained above 1.0, indicating coverage of short-term obligations, the gradual declines in the quick and, more notably, the cash ratios suggest a cautious reduction in the firm’s most liquid resources. This might point to increased investments in less liquid current assets or changes in working capital management. The data does not indicate any liquidity distress but suggests close attention may be warranted to maintain a comfortable liquidity buffer, especially concerning cash availability.

Current Assets

Current assets exhibited an overall upward trend over the periods analyzed, growing from 4,524 million US dollars in March 2021 to a peak of 9,270 million US dollars by June 2025. Though some fluctuations occurred, with occasional declines such as between March and June 2023 and September to December 2025, the general pattern indicates strong growth and an expansion in liquid and short-term resources available to the company.

Current Liabilities

Current liabilities have also shown a growing trajectory, increasing from 3,664 million US dollars in March 2021 to 8,495 million US dollars in September 2025. This growth was marked by intermittent declines, particularly in mid to late 2022 before resuming an upward trend again in 2023 and 2024. The rise in liabilities is significant but does not outpace the growth of current assets substantially.

Current Ratio

The current ratio fluctuated moderately within a narrow range across the periods, starting at 1.23 in March 2021 and ending at 1.06 in September 2025. The ratio mostly remained slightly above 1.0, indicating a consistent ability to cover short-term liabilities with short-term assets. Notably, the ratio saw a peak of 1.24 in September 2022 and a low of 1.05 during multiple periods, reflecting some variability but overall maintaining a stable liquidity position through the years.

Summary Insights

The company demonstrated steady growth in both current assets and current liabilities, with assets generally growing at a pace that supports a stable current ratio slightly above 1. This suggests prudent management of working capital, ensuring liquidity to meet short-term obligations without excessive accumulation of liabilities. Despite periodic fluctuations, the financial health in terms of short-term liquidity remained sound, with the current ratio indicating reasonable coverage of current liabilities by current assets throughout the timespan.

The analysis of the quarterly financial data reveals several notable trends with respect to total quick assets, current liabilities, and the quick ratio over the observed periods.

Total Quick Assets

Total quick assets demonstrate a generally upward trajectory across the quarters. Starting from approximately 4,342 million US dollars in March 2021, there is a marked increase peaking around 8,519 million US dollars by December 2024. Despite some fluctuations, particularly minor declines in a few quarters such as from March to June 2023 and from June to September 2025, the overall pattern indicates growth in liquid and near-liquid assets over time.

Current Liabilities

Current liabilities have also shown an increasing trend, beginning at 3,664 million US dollars in March 2021 and rising to a peak around 8,495 million US dollars in September 2025. Similar to quick assets, current liabilities exhibit intermittent increments and downturns but generally increase steadily, aligning somewhat with the expansion observed in quick assets.

Quick Ratio

The quick ratio fluctuates around the 1.00 mark throughout the periods, indicating a relatively stable short-term liquidity position. It started at 1.19 in March 2021, which is a comfortable liquidity buffer, then decreased to values closer to 1 or slightly below 1 in later quarters. By the end of the series, the quick ratio falls slightly below 1, at 0.96 in September 2025, suggesting a marginally tightened liquidity position relative to current liabilities.

Overall Insights

The growing levels of total quick assets and current liabilities indicate expansion in both liquid resource availability and short-term obligations, potentially reflecting business growth or increased operational scale. However, the decline in the quick ratio toward slightly below 1 in the later periods may warrant careful monitoring to ensure liquidity remains sufficient to cover short-term liabilities without stress. Maintaining or improving the quick ratio is essential for preserving financial flexibility and minimizing liquidity risk.

The analysis of the quarterly financial data reveals distinct trends in cash management and liquidity over the reported periods.

Total Cash Assets

Total cash assets exhibited fluctuations throughout the periods, starting at approximately 3,456 million US dollars and experiencing a general upward trend with occasional declines. Notably, cash assets peaked at around 6,597 million US dollars in the quarter ending March 31, 2025, indicating a significant increase in liquidity over the longer-term period. Despite some intermittent decreases, the overall cash asset position has strengthened, reflecting potential improvements in cash flow or financing activities.

Current Liabilities

Current liabilities displayed variability with a tendency to increase in more recent quarters. Starting near 3,664 million US dollars, current liabilities rose substantially, reaching peaks over 8,300 million US dollars at some points in 2025. The trajectory suggests growing short-term obligations, which could indicate higher operational commitments or increased use of short-term financing. The sharp increases in current liabilities towards the later dates highlight potential pressure on working capital management.

Cash Ratio

The cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, shows a declining trend overall. Beginning at a healthy 0.94, this ratio dropped to lows around 0.66 to 0.69 in multiple periods, signifying a relative decrease in cash coverage against current liabilities. Although there were periods of partial recovery, the ratio remained below 1.0 consistently in the latter quarters, suggesting tighter liquidity and potentially less cushion to meet short-term obligations purely from cash holdings.

In summary, while total cash assets have generally increased, the concurrent rise in current liabilities has outpaced cash growth, leading to a declining cash ratio. This trend indicates increasing liquidity risks and emphasizes the importance of continued focus on cash management and current liability controls to maintain short-term financial stability.