Pure Storage Inc (PSTG)
Cash ratio
Feb 4, 2024 | Feb 5, 2023 | Feb 6, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|
Cash and cash equivalents | US$ in thousands | 702,536 | 580,854 | 466,199 | 337,147 | 362,635 |
Short-term investments | US$ in thousands | 828,557 | 1,001,350 | 947,073 | 916,388 | 936,518 |
Total current liabilities | US$ in thousands | 1,365,680 | 1,749,870 | 952,320 | 760,653 | 614,741 |
Cash ratio | 1.12 | 0.90 | 1.48 | 1.65 | 2.11 |
February 4, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($702,536K
+ $828,557K)
÷ $1,365,680K
= 1.12
The cash ratio of Pure Storage Inc has fluctuated over the past five years, ranging from 0.90 to 2.11. The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying heavily on external financing.
Analyzing Pure Storage Inc's cash ratio trend, we observe a general decrease from 2.11 in 2020 to 0.90 in 2023, followed by a slight improvement to 1.12 in 2024. The decrease in the cash ratio may suggest a reduced liquidity position or increased short-term liabilities relative to cash holdings.
However, it is important to note that a high cash ratio may also imply that the company is holding excess cash that could potentially be invested more effectively elsewhere to generate higher returns. Therefore, Pure Storage Inc should carefully evaluate its cash management strategies to strike a balance between liquidity needs and optimizing cash utilization for future growth and profitability.
Peer comparison
Feb 4, 2024