Guidewire Software Inc (GWRE)
Current ratio
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 1,295,530 | 1,099,600 | 1,252,700 | 1,355,280 | 1,343,220 |
| Total current liabilities | US$ in thousands | 837,635 | 373,261 | 337,518 | 300,314 | 225,198 |
| Current ratio | 1.55 | 2.95 | 3.71 | 4.51 | 5.96 |
July 31, 2024 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $1,295,530K ÷ $837,635K
= 1.55
The current ratio of Guidewire Software Inc has demonstrated a declining trend over the past five years. As of July 31, 2020, the current ratio was at a robust level of 5.96, indicating strong liquidity and ability to cover short-term obligations with current assets. However, this ratio has steadily decreased, reaching 4.51 by July 31, 2021, and further declining to 3.71, 2.95, and 1.55 for the fiscal years ending July 31, 2022, 2023, and 2024 respectively.
The declining current ratio suggests that Guidewire Software Inc may be facing challenges in maintaining sufficient current assets to meet its short-term liabilities. A current ratio below 1 signifies that current liabilities exceed current assets, raising concerns about the company's short-term solvency and ability to fulfill its near-term financial obligations.
It is essential for Guidewire Software Inc to closely monitor its current ratio and take necessary steps to improve liquidity and working capital management, such as increasing current assets or decreasing current liabilities. Addressing the declining trend in the current ratio will be crucial for the company to ensure financial stability and meet its short-term obligations effectively.
Peer comparison
Jul 31, 2024