Paylocity Holdng (PCTY)

Cash ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Cash and cash equivalents	US$ in thousands	401,811	288,767	139,756	202,287	250,851
Short-term investments	US$ in thousands	—	—	4,456	4,456	34,556
Total current liabilities	US$ in thousands	3,117,360	2,774,800	4,120,530	1,867,020	1,408,940
Cash ratio		0.13	0.10	0.03	0.11	0.20

June 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($401,811K + $—K) ÷ $3,117,360K
= 0.13

The cash ratio of Paylocity Holdng has varied over the past five years, ranging from 0.03 to 0.20. The cash ratio measures the company's ability to cover its current liabilities with its cash and cash equivalents.

In 2024, the cash ratio improved to 0.13 compared to 0.10 in 2023. This indicates that the company had a higher level of cash and cash equivalents relative to its current liabilities in 2024. However, it is important to note that the ratio is still relatively low, suggesting that Paylocity Holdng may have limited liquidity available to cover its short-term obligations.

Looking back, the cash ratio was lowest in 2022 at 0.03, indicating a significant increase in current liabilities compared to cash and cash equivalents. The significant improvement in 2024 from the low in 2022 may reflect better management of cash and working capital in the intervening years.

Overall, while the cash ratio of Paylocity Holdng has shown some fluctuation, it is essential for the company to maintain a healthy balance between cash reserves and current liabilities to ensure its financial stability and ability to meet short-term obligations.