Palo Alto Networks Inc (PANW)

Liquidity ratios

Jul 31, 2024 Apr 30, 2024 Jan 31, 2024 Oct 31, 2023 Jul 31, 2023 Apr 30, 2023 Jan 31, 2023 Oct 31, 2022 Jul 31, 2022 Apr 30, 2022 Jan 31, 2022 Oct 31, 2021 Jul 31, 2021 Apr 30, 2021 Jan 31, 2021 Oct 31, 2020 Jul 31, 2020 Apr 30, 2020 Jan 31, 2020 Oct 31, 2019
Current ratio 0.89 0.84 0.83 0.86 0.78 0.74 0.64 0.70 0.77 0.74 0.66 0.68 0.91 1.38 0.98 1.63 1.91 1.29 1.78 1.78
Quick ratio 0.77 0.73 0.74 0.77 0.68 0.65 0.57 0.63 0.71 0.68 0.59 0.61 0.82 1.24 0.88 1.48 1.78 1.16 1.64 1.64
Cash ratio 0.34 0.41 0.43 0.52 0.31 0.46 0.39 0.46 0.44 0.50 0.45 0.48 0.57 0.98 0.72 1.22 1.39 0.87 1.40 1.39

Palo Alto Networks Inc's liquidity ratios show varying trends over the past few quarters. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has declined from 1.78 in October 2019 to 0.89 in July 2024. This indicates a weakening liquidity position over the period.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibits a similar declining trend from 1.64 in October 2019 to 0.77 in July 2024. The company's ability to meet its short-term obligations without relying on inventory has weakened over time.

Furthermore, the cash ratio, which specifically focuses on the company's ability to cover current liabilities with its cash and cash equivalents, has shown fluctuations but generally decreased from 1.40 in October 2019 to 0.34 in July 2024. This suggests a decrease in the proportion of liquid assets available to cover short-term obligations.

Overall, Palo Alto Networks Inc's liquidity ratios indicate a declining trend in its ability to meet short-term obligations with its current assets. Management may need to closely monitor liquidity levels and take appropriate steps to improve liquidity position in the future.

See also:

Palo Alto Networks Inc Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Jul 31, 2024 Apr 30, 2024 Jan 31, 2024 Oct 31, 2023 Jul 31, 2023 Apr 30, 2023 Jan 31, 2023 Oct 31, 2022 Jul 31, 2022 Apr 30, 2022 Jan 31, 2022 Oct 31, 2021 Jul 31, 2021 Apr 30, 2021 Jan 31, 2021 Oct 31, 2020 Jul 31, 2020 Apr 30, 2020 Jan 31, 2020 Oct 31, 2019
Cash conversion cycle days 144.56 100.10 101.73 108.69 166.88 112.26 100.58 77.61 139.61 87.62 70.67 66.45 111.95 68.11 64.39 66.22 106.01 69.78 57.23 51.35

The cash conversion cycle measures the time it takes for a company like Palo Alto Networks Inc to convert its investments in inventory and accounts receivable into cash flows from sales to customers. A shorter cash conversion cycle indicates a more efficient management of working capital.

Analyzing the data, we observe fluctuations in Palo Alto Networks Inc's cash conversion cycle over the past few years. The cycle ranged from a low of 51.35 days in October 2019 to a high of 166.88 days in July 2023. This variability suggests potential challenges in managing working capital effectively.

In the recent period, the cash conversion cycle was 144.56 days in July 2024, reflecting an increase from the previous quarter. This prolonged cycle may indicate issues with inventory management, accounts receivable collection, or payment timing. The company may need to focus on streamlining its operations to shorten the cycle and boost cash flows available for investment or other purposes.

Overall, Palo Alto Networks Inc should continue monitoring and improving its cash conversion cycle to enhance its financial efficiency and liquidity management. Close attention to working capital components such as inventory levels, accounts receivable policies, and vendor payment terms could help optimize the cycle and support sustained business growth.