Paychex Inc (PAYX)
Cash ratio
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,468,900 | 1,222,000 | 370,000 | 995,200 | 905,200 |
| Short-term investments | US$ in thousands | 33,900 | 373,400 | 853,900 | 36,700 | 27,200 |
| Total current liabilities | US$ in thousands | 5,309,100 | 5,805,400 | 5,269,200 | 4,938,200 | 4,426,900 |
| Cash ratio | 0.28 | 0.27 | 0.23 | 0.21 | 0.21 |
May 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,468,900K
+ $33,900K)
÷ $5,309,100K
= 0.28
The cash ratio for Paychex Inc has shown a gradual increase over the past five years, reaching 0.28 as of May 31, 2024, indicating the company's improved ability to cover its short-term liabilities with its cash and cash equivalents. This implies that for every dollar of current liabilities, Paychex Inc had $0.28 of cash on hand, highlighting a stronger liquidity position compared to previous years.
The consistent upward trend in the cash ratio suggests that the company has been effectively managing its cash resources, potentially through efficient cash flow management and prudent financial planning. This enhanced liquidity position can provide Paychex Inc with greater financial flexibility to meet its ongoing obligations and capitalize on strategic opportunities as they arise.
Overall, the increasing cash ratio reflects positively on Paychex Inc's financial health and stability, indicating a solid foundation for weathering potential economic uncertainties and supporting future growth initiatives.