Paycom Soft (PAYC)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	402,000	294,025	400,730	277,978	151,710
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	3,906,800	2,534,640	2,377,040	1,990,410	1,718,030
Cash ratio		0.10	0.12	0.17	0.14	0.09

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($402,000K + $—K) ÷ $3,906,800K
= 0.10

The cash ratio measures a company's ability to cover its short-term liabilities using its available cash and cash equivalents. For Paycom Soft, the trend in the cash ratio shows fluctuations over the years. In December 31, 2020, the cash ratio was 0.09, indicating that the company had $0.09 in cash and cash equivalents for every $1 of current liabilities.

Over the subsequent years, the cash ratio improved to 0.14 in December 31, 2021, further increasing to 0.17 in December 31, 2022, suggesting a strengthening liquidity position. However, there was a slight dip in the cash ratio to 0.12 in December 31, 2023, followed by a small decrease to 0.10 in December 31, 2024.

The fluctuation in the cash ratio could be attributed to changes in the company's cash management practices, investment decisions, or variations in operating performance affecting cash flows. Overall, a cash ratio above 1.0 is generally considered healthy, indicating that a company has sufficient cash to cover its short-term obligations. Paycom Soft's cash ratio trend should be monitored to ensure adequate liquidity for meeting its financial obligations.