NetScout Systems Inc (NTCT)

Quick ratio

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Cash	US$ in thousands	457,415	389,674	386,794	636,161	467,176
Short-term investments	US$ in thousands	34,058	33,459	32,204	67,037	9,277
Receivables	US$ in thousands	163,654	192,096	143,855	148,245	197,717
Total current liabilities	US$ in thousands	407,932	395,082	453,607	476,160	411,275
Quick ratio		1.61	1.56	1.24	1.79	1.64

March 31, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($457,415K + $34,058K + $163,654K) ÷ $407,932K
= 1.61

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. The quick ratio is calculated by dividing quick assets (cash, marketable securities, and accounts receivable) by current liabilities.

For NetScout Systems Inc, the quick ratio has fluctuated over the past five years. It stood at 1.64 on March 31, 2021, indicating that the company had $1.64 in quick assets available for every $1 of current liabilities. Over the subsequent years, the quick ratio improved, reaching 1.79 on March 31, 2022, suggesting an enhanced ability to cover short-term obligations.

However, the quick ratio decreased to 1.24 by March 31, 2023, raising concerns about the company's liquidity position. This indicates that the company had $1.24 in quick assets available for every $1 of current liabilities, potentially signaling a difficulty in meeting short-term obligations.

The quick ratio rebounded to 1.56 on March 31, 2024, and further increased to 1.61 by March 31, 2025. These improvements are positive signs as they show that NetScout Systems Inc has been able to enhance its liquidity position and strengthen its ability to meet short-term obligations over the past two years.

In conclusion, NetScout Systems Inc's quick ratio has shown some volatility in recent years, but the overall trend indicates a reasonable ability to cover short-term liabilities with liquid assets, with the company demonstrating improvements in liquidity management in the most recent years.