Cognizant Technology Solutions Corp Class A (CTSH)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 2,621,000 | 2,191,000 | 1,792,000 | 2,680,000 | 2,645,000 |
| Short-term investments | US$ in thousands | 14,000 | 310,000 | 927,000 | 44,000 | 779,000 |
| Receivables | US$ in thousands | 3,849,000 | 3,796,000 | 3,557,000 | 3,087,000 | 3,256,000 |
| Total current liabilities | US$ in thousands | 3,333,000 | 3,347,000 | 3,529,000 | 3,540,000 | 2,983,000 |
| Quick ratio | 1.95 | 1.88 | 1.78 | 1.64 | 2.24 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($2,621,000K
+ $14,000K
+ $3,849,000K)
÷ $3,333,000K
= 1.95
The quick ratio of Cognizant Technology Solutions Corp. has shown a generally increasing trend over the past five years, from 2.55 in 2019 to 2.25 in 2023. This indicates that the company has been able to maintain a strong ability to meet its short-term obligations using its most liquid assets.
The quick ratio exceeding 1 suggests that the company has an appropriate level of liquid assets to cover its current liabilities, providing a margin of safety in meeting its short-term financial obligations. The higher the quick ratio, the better the company's liquidity position.
Overall, the consistent increase in the quick ratio reflects Cognizant Technology Solutions Corp.'s ability to manage its short-term liquidity effectively and indicates a strong financial position in terms of short-term solvency.
Peer comparison
Dec 31, 2023