Progress Software Corporation (PRGS)

Quick ratio

		Nov 30, 2024	Nov 30, 2023	Nov 30, 2022	Nov 30, 2021	Nov 30, 2020
Cash	US$ in thousands	118,077	126,958	256,277	155,406	97,990
Short-term investments	US$ in thousands	—	—	0	1,967	8,005
Receivables	US$ in thousands	163,575	125,825	97,834	99,815	84,040
Total current liabilities	US$ in thousands	455,145	352,118	318,004	322,929	262,543
Quick ratio		0.62	0.72	1.11	0.80	0.72

November 30, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($118,077K + $—K + $163,575K) ÷ $455,145K
= 0.62

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio above 1 indicates that the company can fully cover its current liabilities with its quick assets.

Progress Software Corporation's quick ratio has fluctuated over the past five years, starting at 0.72 on November 30, 2020, increasing to 0.80 by November 30, 2021, and peaking at 1.11 on November 30, 2022. This improvement suggests that the company enhanced its liquidity position and became better equipped to meet its short-term obligations efficiently during this period.

However, there was a significant decline in the quick ratio to 0.72 on November 30, 2023, followed by a further decrease to 0.62 on November 30, 2024. These lower ratios may raise concerns about the company's ability to cover its current liabilities with its quick assets, indicating potential liquidity challenges that may need to be addressed.

In conclusion, while Progress Software Corporation managed to strengthen its liquidity position in the past, the recent downward trend in the quick ratio signals a potential risk in meeting short-term obligations. Continuous monitoring of liquidity management practices and potential adjustments may be necessary to ensure financial stability and sustainability.