Paychex Inc (PAYX)
Quick ratio
| May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,468,900 | 1,693,600 | 1,363,100 | 1,645,900 | 1,222,000 | 1,316,900 | 1,096,500 | 1,184,200 | 370,000 | 267,500 | 636,200 | 1,102,000 | 995,200 | 787,000 | 693,500 | 835,700 | 905,200 | 780,000 | 600,600 | 586,400 |
| Short-term investments | US$ in thousands | 33,900 | 36,600 | 34,400 | 45,700 | 373,400 | 240,100 | 165,600 | 45,800 | 853,900 | 1,086,000 | 376,000 | 39,600 | 36,700 | 203,700 | 174,900 | 30,600 | 27,200 | 73,800 | 34,400 | 40,900 |
| Receivables | US$ in thousands | 1,625,300 | 1,702,100 | 1,650,800 | 1,574,600 | 1,426,200 | 1,415,000 | 1,391,600 | 1,373,300 | 1,318,200 | 1,204,700 | 1,371,500 | 1,084,500 | 1,053,600 | 1,105,900 | 991,800 | 855,900 | 790,300 | 847,000 | 905,600 | 861,400 |
| Total current liabilities | US$ in thousands | 5,309,100 | 8,000,800 | 7,254,400 | 7,343,500 | 5,805,400 | 5,958,100 | 4,753,900 | 4,702,200 | 5,269,200 | 5,687,900 | 5,221,900 | 4,957,900 | 4,938,200 | 5,356,000 | 4,380,000 | 4,263,100 | 4,426,900 | 5,389,700 | 4,823,900 | 4,823,500 |
| Quick ratio | 0.59 | 0.43 | 0.42 | 0.44 | 0.52 | 0.50 | 0.56 | 0.55 | 0.48 | 0.45 | 0.46 | 0.45 | 0.42 | 0.39 | 0.42 | 0.40 | 0.39 | 0.32 | 0.32 | 0.31 |
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, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. It is calculated by dividing quick assets (current assets excluding inventory) by current liabilities.
Analyzing the quick ratio of Paychex Inc over the past two years, we observe fluctuations in the ratio. The quick ratio ranged from 0.31 to 0.59 during this period.
Notably, the quick ratio increased from 0.31 in August 2019 to reach its peak at 0.59 in May 2024, signaling an improvement in the company's ability to meet its short-term financial obligations using its quick assets.
However, the ratio experienced some fluctuations throughout the period, indicating potential variations in Paychex Inc's liquidity position. It decreased to 0.32 in February 2020 and August 2020 before gradually increasing again.
Overall, a higher quick ratio indicates a stronger ability to cover short-term liabilities, while a lower ratio may imply potential liquidity challenges. It is essential for stakeholders to monitor the company's quick ratio over time to assess its liquidity position and financial health effectively.