ServiceNow Inc (NOW)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,897,000 | 1,470,000 | 1,728,000 | 1,677,000 | 776,000 |
| Short-term investments | US$ in thousands | 2,980,000 | 2,810,000 | 1,576,000 | 1,415,240 | 915,317 |
| Receivables | US$ in thousands | 2,036,000 | 1,725,000 | 1,390,000 | 1,009,420 | 835,279 |
| Total current liabilities | US$ in thousands | 7,365,000 | 6,005,000 | 4,949,000 | 3,737,000 | 2,752,780 |
| Quick ratio | 0.94 | 1.00 | 0.95 | 1.10 | 0.92 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,897,000K
+ $2,980,000K
+ $2,036,000K)
÷ $7,365,000K
= 0.94
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. It is calculated by dividing quick assets (current assets excluding inventories) by current liabilities.
ServiceNow Inc's quick ratio has fluctuated over the past five years, ranging from 1.03 to 1.21. The quick ratio indicates the company's ability to cover its short-term liabilities with its quick assets. A quick ratio of 1.0 or higher is generally considered healthy, as it suggests that the company has enough liquid assets to cover its short-term obligations.
The slight fluctuations in the quick ratio over the years suggest variability in the company's ability to quickly cover its short-term liabilities with its liquid assets. However, the ratios consistently remain above 1.0, indicating that ServiceNow Inc has had sufficient quick assets to cover its short-term liabilities each year.
Overall, ServiceNow Inc's quick ratio has generally remained at healthy levels, providing confidence in the company's short-term liquidity position.
Peer comparison
Dec 31, 2023