F5 Networks Inc (FFIV)

Quick ratio

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cash	US$ in thousands	797,163	758,012	580,977	849,556	599,219
Short-term investments	US$ in thousands	6,160	126,554	329,630	360,333	373,063
Receivables	US$ in thousands	454,832	469,979	340,536	296,183	322,029
Total current liabilities	US$ in thousands	1,472,780	1,839,950	1,391,530	1,288,280	1,105,530
Quick ratio		0.85	0.74	0.90	1.17	1.17

September 30, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($797,163K + $6,160K + $454,832K) ÷ $1,472,780K
= 0.85

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. A quick ratio of 1 or higher is generally considered healthy, as it indicates that the company can cover its current liabilities with its quick assets, such as cash, marketable securities, and accounts receivable.

Looking at the trend in F5 Inc's quick ratio from 2019 to 2023, we see fluctuations in the ratio over the years. In 2019, the quick ratio was 1.34, indicating that the company had more than enough quick assets to cover its short-term liabilities. This is a favorable sign of financial health.

In 2020, the quick ratio increased to 1.37, further strengthening the company's ability to meet its short-term obligations. This could suggest effective management of working capital and liquidity.

However, in 2021, the quick ratio decreased to 1.14, signaling a slight decrease in the company's ability to cover its current liabilities with quick assets. While the ratio was still above 1, indicating the company's ability to meet its short-term obligations, the decline should be monitored as it may indicate a potential strain on liquidity.

The trend continued in 2022, with the quick ratio further dropping to 1.00. This could raise concerns about the company's short-term financial health and ability to handle its immediate liabilities with its available quick assets.

Finally, in 2023, the quick ratio rebounded to 1.23. While this is an improvement from the previous year, it's still below the ratios observed in 2019 and 2020. This indicates that F5 Inc's liquidity position has improved but may still not be as strong as it was in the earlier years.

Overall, the fluctuation in F5 Inc's quick ratio raises questions about the company's ability to maintain a consistent level of liquidity over the years. It's essential for stakeholders to closely monitor the company's management of current assets and liabilities to ensure its short-term financial stability.