Guidewire Software Inc (GWRE)
Cash ratio
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 697,902 | 547,992 | 401,813 | 606,303 | 384,910 |
| Short-term investments | US$ in thousands | 451,541 | 455,576 | 396,872 | 369,865 | 734,517 |
| Total current liabilities | US$ in thousands | 544,802 | 837,635 | 373,261 | 337,518 | 300,314 |
| Cash ratio | 2.11 | 1.20 | 2.14 | 2.89 | 3.73 |
July 31, 2025 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($697,902K
+ $451,541K)
÷ $544,802K
= 2.11
The cash ratio of Guidewire Software Inc. demonstrates a declining trend over the analyzed period from July 31, 2021, to July 31, 2025. Specifically, the ratio was 3.73 as of July 31, 2021, indicating a strong cash position relative to current liabilities. By July 31, 2022, this ratio decreased to 2.89, reflecting a reduction in the company's cash holdings relative to its short-term liabilities, yet still signifying a comfortable liquidity cushion. The downward movement persisted into July 31, 2023, when the ratio further declined to 2.14, suggesting a further decrease in cash reserves relative to current liabilities.
This declining trend continued into July 31, 2024, with the ratio falling to 1.20. A cash ratio close to this level indicates that the company’s cash and cash equivalents are just slightly above its current liabilities, potentially signaling a tightening liquidity position. However, by July 31, 2025, the cash ratio rebounded to 2.11, almost returning to the levels observed in 2022. This rebound suggests an improvement in cash reserves relative to current liabilities, although it still remains below the initial high seen in 2021.
Overall, the fluctuation and downward trend in the cash ratio reflect periods of reduced cash holdings in relation to short-term obligations, with a notable dip around mid-2024 and a subsequent recovery by mid-2025. This pattern may imply strategic adjustments in liquidity management or changes in the company's cash flow positions over the period.