Paychex Inc (PAYX)
Quick ratio
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | 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 |
| Receivables | US$ in thousands | 1,625,300 | 1,426,200 | 1,318,200 | 1,053,600 | 790,300 |
| Total current liabilities | US$ in thousands | 5,309,100 | 5,805,400 | 5,269,200 | 4,938,200 | 4,426,900 |
| Quick ratio | 0.59 | 0.52 | 0.48 | 0.42 | 0.39 |
May 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,468,900K
+ $33,900K
+ $1,625,300K)
÷ $5,309,100K
= 0.59
The quick ratio of Paychex Inc has shown an improving trend over the past five years. The quick ratio measures the company's ability to meet its short-term obligations using its most liquid assets, excluding inventory.
In May 2024, the quick ratio stands at 0.59, indicating that the company had $0.59 of liquid assets available to cover $1 of current liabilities. This demonstrates an improvement from the quick ratio of 0.52 in 2023, 0.48 in 2022, 0.42 in 2021, and 0.39 in 2020.
The increasing trend in the quick ratio could suggest that Paychex Inc has been effectively managing its liquidity position and has been able to strengthen its ability to meet its short-term financial obligations. This can be a positive sign for investors and creditors, as a higher quick ratio indicates a company's ability to easily cover its short-term liabilities. However, it is important to consider other financial metrics and factors to get a comprehensive understanding of the company's overall financial health.