Automatic Data Processing Inc (ADP)

Cash ratio

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Cash and cash equivalents	US$ in thousands	2,913,400	3,291,700	1,641,300	1,441,400	2,083,500	1,828,400	1,345,000	1,207,700	1,436,300	1,634,200	1,745,000	1,602,100	2,575,200	1,891,500	1,602,200	1,613,100	1,908,500	1,705,000	1,500,400	1,403,900
Short-term investments	US$ in thousands	384,000	0	24,400	146,800	14,700	26,300	16,400	24,400	47,000	27,600	19,700	74,300	10,400	10,500	10,600	3,400	0	3,200	7,200	3,545,100
Total current liabilities	US$ in thousands	45,080,000	54,901,900	48,097,700	41,228,700	42,767,600	51,536,100	46,813,700	39,166,200	55,158,700	63,106,500	49,084,000	49,669,900	38,094,800	44,615,200	39,176,500	32,329,600	30,126,600	34,672,800	40,522,400	29,200,900
Cash ratio		0.07	0.06	0.03	0.04	0.05	0.04	0.03	0.03	0.03	0.03	0.04	0.03	0.07	0.04	0.04	0.05	0.06	0.05	0.04	0.17

June 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,913,400K + $384,000K) ÷ $45,080,000K
= 0.07

The cash ratio of Automatic Data Processing Inc has fluctuated over the past few quarters. The ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations.

Looking at the data from the table, we can observe that the cash ratio has ranged from 0.03 to 0.07 in recent quarters. The ratio was relatively stable around 0.03 to 0.05 from December 2020 to September 2023, showing a consistent level of liquidity relative to its current liabilities during that period.

However, there was a significant increase in the cash ratio to 0.07 in March 2021, which may have indicated a stronger cash position or a decrease in short-term liabilities during that specific period.

In general, the overall trend of the cash ratio for Automatic Data Processing Inc suggests that the company has maintained a reasonable level of liquidity to cover its short-term obligations. A higher cash ratio in certain quarters may indicate prudence in managing cash resources, while a lower ratio may signify increased short-term obligations or a more aggressive approach to cash management.