Palo Alto Networks Inc (PANW)

Cash ratio

		Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Cash and cash equivalents	US$ in thousands	1,535,200	1,135,300	2,118,500	1,874,200	2,958,000
Short-term investments	US$ in thousands	1,043,600	1,254,700	1,516,000	1,026,900	789,800
Total current liabilities	US$ in thousands	7,682,700	7,737,500	8,306,300	5,116,700	2,691,700
Cash ratio		0.34	0.31	0.44	0.57	1.39

July 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,535,200K + $1,043,600K) ÷ $7,682,700K
= 0.34

The cash ratio of Palo Alto Networks Inc has exhibited a declining trend over the past five years, decreasing from 1.39 in July 2020 to 0.34 in July 2024. This indicates a gradual reduction in the company's ability to cover its short-term liabilities with its readily available cash and equivalents. While the cash ratio has fluctuated over the years, with a peak of 0.57 in July 2021, the downward trajectory suggests a potential liquidity concern. It is important for the company to closely monitor its cash position and liquidity to ensure it can meet its obligations effectively in the future.