Penguin Solutions, Inc. (PENG)

Cash ratio

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Cash and cash equivalents	US$ in thousands	383,147	365,563	313,328	222,986	150,811
Short-term investments	US$ in thousands	6,337	25,251	0	—	—
Total current liabilities	US$ in thousands	327,596	426,250	515,540	583,798	282,489
Cash ratio		1.19	0.92	0.61	0.38	0.53

August 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($383,147K + $6,337K) ÷ $327,596K
= 1.19

The cash ratio of Penguin Solutions, Inc. has demonstrated notable fluctuations over the period from August 31, 2020, to August 31, 2024. At the end of August 2020, the cash ratio stood at 0.53, indicating that the company's cash and cash equivalents covered approximately 53% of its current liabilities. By August 31, 2021, the ratio declined to 0.38, reflecting a decrease in liquidity and potentially a greater reliance on other current assets or liabilities management strategies during that year.

Subsequently, the cash ratio increased to 0.61 as of August 31, 2022. This upward movement suggests an improvement in liquidity positioning, with cash reserves growing in relation to current liabilities. The most significant rise occurred by August 31, 2023, when the ratio reached 0.92. This near equivalence indicates that the company's cash and cash equivalents were almost sufficient to cover its current liabilities, reflecting a strong liquidity position.

The trend continued positively through August 31, 2024, with the cash ratio surpassing 1.0 to reach 1.19. This indicates that Penguin Solutions, Inc. maintained cash reserves exceeding its current liabilities, thereby enhancing its short-term liquidity safety margin. Overall, the progression of the cash ratio over these years reveals an improving liquidity profile, culminating in a position in 2024 where cash holdings comfortably exceed the immediate obligations.