Pegasystems Inc (PEGA)

Current ratio

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020
Total current assets	US$ in thousands	846,492	1,333,700	1,119,080	1,071,660	1,059,590	1,029,030	776,490	737,511	795,728	846,478	660,241	740,207	803,813	840,218	828,886	910,229	922,153	1,001,430	904,210	969,939
Total current liabilities	US$ in thousands	609,136	1,086,060	1,024,540	1,016,570	1,044,280	577,059	472,781	461,112	474,964	538,940	413,972	435,451	435,015	485,404	400,426	430,244	404,450	415,138	356,322	356,097
Current ratio		1.39	1.23	1.09	1.05	1.01	1.78	1.64	1.60	1.68	1.57	1.59	1.70	1.85	1.73	2.07	2.12	2.28	2.41	2.54	2.72

March 31, 2025 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $846,492K ÷ $609,136K
= 1.39

The analysis of Pegasystems Inc.’s current ratio over the specified period reveals a declining trend from mid-2020 through early 2023, followed by a gradual recovery thereafter. Specifically, the current ratio was relatively high at 2.72 as of June 30, 2020, indicating a strong liquidity position with ample current assets relative to current liabilities. Over the subsequent periods, there was a consistent decline, reaching a low of approximately 1.01 on March 31, 2024, which suggests a weakening liquidity position and a reduced buffer for meeting short-term obligations.

Post-March 2024, the current ratio shows signs of improvement, ascending to 1.23 by the end of 2024 and further increasing to 1.39 by March 31, 2025. This upward movement indicates a tentative strengthening of liquidity, although the ratio remains below the pre-2020 levels. A current ratio above 1 generally signifies that the company possesses more current assets than current liabilities, which is favorable from a liquidity standpoint. However, the decline to just above 1 in early 2024 may imply increased liquidity risks or a potential shift in the company's working capital management.

Overall, Pegasystems Inc. experienced a significant decline in current ratio over the analyzed period, highlighting periods of decreased liquidity that may warrant further investigation into the company’s short-term asset management and risk management strategies. The recent improvement suggests some stabilization, but the current ratio remains relatively modest compared to historical levels, emphasizing the importance of continued monitoring of short-term financial health.