ServiceNow Inc (NOW)
Quick ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,897,000 | 1,112,000 | 1,663,000 | 1,852,000 | 1,470,000 | 1,248,000 | 1,664,000 | 2,252,000 | 1,728,000 | 1,400,000 | 1,362,000 | 1,821,000 | 1,677,000 | 1,348,000 | 837,000 | 809,000 | 776,000 | 622,925 | 583,581 | 639,722 |
| Short-term investments | US$ in thousands | 2,980,000 | 2,955,000 | 3,084,000 | 3,062,000 | 2,810,000 | 2,708,000 | 2,170,000 | 1,762,000 | 1,576,000 | 1,631,000 | 1,622,000 | 1,635,000 | 1,415,240 | 1,603,320 | 1,505,360 | 1,049,980 | 915,317 | 848,148 | 1,069,800 | 1,022,390 |
| Receivables | US$ in thousands | 2,036,000 | 1,168,000 | 1,093,000 | 1,109,000 | 1,725,000 | 898,000 | 853,000 | 824,000 | 1,390,000 | 776,000 | 781,000 | 645,000 | 1,009,420 | 631,055 | 631,992 | 615,234 | 835,279 | 539,416 | 503,376 | 422,559 |
| Total current liabilities | US$ in thousands | 7,365,000 | 5,601,000 | 5,767,000 | 5,761,000 | 6,005,000 | 4,432,000 | 4,743,000 | 4,852,000 | 4,949,000 | 3,792,000 | 3,908,000 | 3,664,000 | 3,737,000 | 2,835,950 | 2,848,870 | 2,721,060 | 2,752,780 | 2,192,560 | 2,224,980 | 2,097,840 |
| Quick ratio | 0.94 | 0.93 | 1.01 | 1.05 | 1.00 | 1.10 | 0.99 | 1.00 | 0.95 | 1.00 | 0.96 | 1.12 | 1.10 | 1.26 | 1.04 | 0.91 | 0.92 | 0.92 | 0.97 | 0.99 |
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. A quick ratio above 1 indicates that a company has enough liquid assets to cover its short-term liabilities.
Looking at ServiceNow Inc's quick ratio over the past eight quarters, we can observe fluctuations in the ratio. From December 31, 2022, to March 31, 2023, the quick ratio showed an upward trend, reaching its peak at 1.17. This suggests that the company had a slightly stronger position in terms of short-term liquidity during this period.
However, in the subsequent quarters, the quick ratio experienced a slight decline, as it stood at 1.06 on December 31, 2023. Despite the fluctuation, the quick ratio consistently remained above 1 throughout the period, indicating that ServiceNow Inc generally maintained an adequate level of liquid assets to cover its short-term obligations.
It is important to note that while a quick ratio above 1 is generally favorable, the company's specific industry and operations should also be considered when evaluating its liquidity position. Moreover, deeper analysis of the composition and quality of the company's current assets would provide further insights into its ability to meet short-term obligations.
Peer comparison
Dec 31, 2023