Guidewire Software Inc (GWRE)

Cash ratio

		Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Cash and cash equivalents	US$ in thousands	823,562	547,992	359,600	349,989	301,419	401,813	266,615	274,899	263,163	606,303	326,861	257,378	239,620	384,910	284,448	331,387	293,836	366,969	293,815	218,463
Short-term investments	US$ in thousands	514,767	455,576	422,691	427,634	411,528	396,872	421,202	439,833	442,023	369,865	481,086	562,753	602,162	734,517	803,885	814,845	856,376	766,527	740,386	836,939
Total current liabilities	US$ in thousands	615,237	837,635	704,807	307,076	262,375	373,261	275,428	275,209	252,764	337,518	237,098	231,151	204,165	300,314	214,297	210,723	185,623	225,198	176,717	182,586
Cash ratio		2.18	1.20	1.11	2.53	2.72	2.14	2.50	2.60	2.79	2.89	3.41	3.55	4.12	3.73	5.08	5.44	6.20	5.03	5.85	5.78

October 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($823,562K + $514,767K) ÷ $615,237K
= 2.18

The cash ratio of Guidewire Software Inc has shown fluctuations over the past few years. The ratio indicates the company's ability to cover its short-term liabilities with its cash and cash equivalents.

From January 31, 2020 to October 31, 2021, the cash ratio remained relatively stable, ranging from 5.03 to 6.20. This indicates that Guidewire Software had a strong ability to meet its short-term obligations with its cash holdings during this period.

However, from January 31, 2022 onwards, the cash ratio began to decline consistently, reaching a low of 1.11 on April 30, 2024. This downward trend may signal potential liquidity challenges for the company in meeting its short-term liabilities solely with its available cash.

Furthermore, despite a slight increase in the cash ratio in the following periods, the ratio remained relatively low, hovering around 2.14 to 2.72 as of October 31, 2023.

Overall, the decreasing trend in the cash ratio of Guidewire Software Inc from 2022 to 2024 suggests that the company may need to carefully manage its liquidity position to ensure it can meet its short-term obligations effectively.