Pegasystems Inc (PEGA)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	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
Receivables	US$ in thousands	552,898	558,594	468,869	421,961	536,260
Total current liabilities	US$ in thousands	1,086,060	577,059	538,940	485,404	415,138
Quick ratio		1.19	1.70	1.42	1.62	2.41

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($337,103K + $402,870K + $552,898K) ÷ $1,086,060K
= 1.19

The quick ratio of Pegasystems Inc. demonstrates a fluctuating trend over the specified period from December 31, 2020, to December 31, 2024. At the end of 2020, the quick ratio stood at 2.41, indicating a robust short-term liquidity position with more than double the current liquid assets relative to current liabilities.

However, by the end of 2021, the ratio declined significantly to 1.62, suggesting a reduction in the company's liquid assets relative to its current liabilities, although it still maintained a comfortable liquidity buffer. This downward trend continued into 2022, with the ratio decreasing further to 1.42, indicating a continued tightening of the company's liquidity position but remaining above the critical threshold of 1.0, which implies that liquid assets were still sufficient to cover current liabilities.

In 2023, the quick ratio increased slightly again to 1.70, reflecting a modest improvement in liquidity compared to 2022. Despite this uptick, the ratio did not return to the earlier high of 2020, indicating ongoing liquidity management adjustments within the company.

By the end of 2024, the quick ratio decreased to 1.19, approaching a level close to 1.0. While this still suggests that the company’s liquid assets are slightly more than enough to meet short-term obligations, the narrowing margin indicates a relative weakening in immediate liquidity position over the observed period.

Overall, Pegasystems Inc.'s quick ratio trend suggests a trajectory of diminishing liquidity strength from 2020 through 2024, with fluctuations that reflect adjustments in liquid asset levels and current liabilities. Although the ratio has remained above the critical threshold of 1.0 throughout, the decline towards this level warrants ongoing monitoring for potential liquidity risks in the future.