Guidewire Software Inc (GWRE)
Quick ratio
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Cash | 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 |
| Receivables | US$ in thousands | 271,598 | 242,177 | 256,486 | 227,450 | 192,916 |
| Total current liabilities | US$ in thousands | 544,802 | 837,635 | 373,261 | 337,518 | 300,314 |
| Quick ratio | 2.61 | 1.49 | 2.83 | 3.57 | 4.37 |
July 31, 2025 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($697,902K
+ $451,541K
+ $271,598K)
÷ $544,802K
= 2.61
The quick ratio of Guidewire Software Inc. has exhibited notable fluctuations over the specified period from July 31, 2021, to July 31, 2025. At the end of July 2021, the company maintained a strong liquidity position, with a quick ratio of 4.37, indicating that its most liquid assets were more than four times its current liabilities. Over the subsequent year, this ratio declined to 3.57 by July 31, 2022, reflecting a reduction in the company's liquid assets relative to its short-term obligations, but still suggesting a robust liquidity buffer.
The downward trend continued into July 2023, with the quick ratio decreasing further to 2.83. Although this signals a diminishing liquidity cushion, the ratio remained above 2, typically considered a healthy threshold, indicating that the company could cover its immediate liabilities more than twice with its liquid assets.
By July 31, 2024, the quick ratio declined sharply to 1.49, approaching a more conservative liquidity position. This significant reduction may imply a decrease in liquid assets or an increase in current liabilities, which could potentially raise concerns regarding the company's ability to meet its short-term obligations promptly.
However, there was a modest improvement observed by July 31, 2025, with the quick ratio rising to 2.61. This resurgence suggests an enhanced liquidity position, possibly due to strategic asset management or changes in short-term liability structure, positioning the company more favorably to meet its immediate financial commitments.
Overall, the trend showcases a transition from a very strong liquidity position in 2021 to a more moderate level around 2024, with some recovery in 2025. These shifts may warrant further analysis of the underlying factors influencing the company's liquid assets and current liabilities to understand the causes of these changes and their implications for financial stability.