Pegasystems Inc (PEGA)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	337,103	229,902	145,054	159,965	171,899
Short-term investments	US$ in thousands	402,870	193,436	152,167	202,814	293,269
Total current liabilities	US$ in thousands	1,086,060	577,059	538,940	485,404	415,138
Cash ratio		0.68	0.73	0.55	0.75	1.12

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($337,103K + $402,870K) ÷ $1,086,060K
= 0.68

The cash ratio of Pegasystems Inc. has exhibited notable fluctuations over the analyzed period from December 31, 2020, to December 31, 2024. At the end of 2020, the company maintained a relatively strong liquidity position with a cash ratio of 1.12, indicating that its cash and cash equivalents were sufficient to cover its current liabilities entirely and even exceeded them.

However, by the end of 2021, the cash ratio declined to 0.75, reflecting a decrease in liquidity and suggesting that a smaller proportion of current liabilities was covered by cash and cash equivalents alone. This downward trend continued into 2022, with the cash ratio reaching 0.55, the lowest within the analyzed timeframe, which could imply a further reduction in cash holdings relative to current liabilities or increased current obligations.

In subsequent years, the cash ratio displayed a modest recovery, increasing to 0.73 at the end of 2023, and then slightly decreasing again to 0.68 by the end of 2024. These movements suggest a partial stabilization in liquidity levels, though they remain below the more comfortable threshold close to 1.0 observed in 2020.

Overall, the trend indicates a shift from a robust liquidity position at the start of the period toward a somewhat tighter cash liquidity coverage in recent years. The fluctuations may be attributable to changes in cash holdings, current liabilities, or both, and suggest a cautious approach to liquidity management, with the company maintaining sufficient cash relative to short-term obligations but with less margin of safety than in 2020.