Paylocity Holdng (PCTY)

Quick ratio

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Cash	US$ in thousands	398,070	401,811	288,767	139,756	202,287
Short-term investments	US$ in thousands	—	—	—	4,456	4,456
Receivables	US$ in thousands	41,642	32,997	25,085	15,754	6,267
Total current liabilities	US$ in thousands	210,428	3,117,360	2,774,800	4,120,530	1,867,020
Quick ratio		2.09	0.14	0.11	0.04	0.11

June 30, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($398,070K + $—K + $41,642K) ÷ $210,428K
= 2.09

The quick ratio of Paylocity Holding demonstrates significant variation across the five-year period from June 30, 2021, to June 30, 2025. In 2021, the ratio stood at 0.11, indicating that the company's most liquid assets were insufficient to cover its current liabilities by a substantial margin, reflecting limited short-term liquidity. This ratio further declined to 0.04 in 2022, suggesting a deterioration in liquidity, potentially due to a decline in liquid assets or an increase in current liabilities during that year.

By June 30, 2023, the quick ratio improved modestly to 0.11, indicating some stabilization or slight increase in liquidity levels compared to the previous year. The upward trend continued into 2024, with the ratio increasing further to 0.14, reflecting a gradual improvement in the company's ability to meet short-term obligations with its liquid assets.

The most notable change occurs between 2024 and 2025, where the quick ratio rises sharply from 0.14 to 2.09. This substantial increase suggests a significant enhancement in short-term liquidity, implying that by June 30, 2025, the company possesses liquid assets that exceed its current liabilities by a considerable margin. Such a shift may indicate improved cash flow management, a reduction in current liabilities, or an increase in liquid assets.

Overall, the trend in Paylocity Holding’s quick ratio points to an initial period of liquidity constraints in the early years, followed by a noteworthy enhancement in liquidity position approaching 2025. The escalation to a ratio well above 1.0 indicates a strong short-term liquidity position in the most recent period, providing the company with greater financial flexibility to meet its obligations promptly.