Simulations Plus Inc (SLP)

Current ratio

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Total current assets	US$ in thousands	130,372	146,790	139,313	129,092	21,165
Total current liabilities	US$ in thousands	11,987	7,735	11,574	5,506	4,783
Current ratio		10.88	18.98	12.04	23.45	4.43

August 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $130,372K ÷ $11,987K
= 10.88

The current ratio of Simulations Plus Inc. has fluctuated over the past five years, indicating changes in its short-term liquidity position. In 2023, the current ratio decreased to 10.88 from 18.98 in 2022. This suggests a decline in the company's ability to meet its short-term liabilities with its current assets. However, it is essential to note that a current ratio of over 1 generally indicates a strong liquidity position. Compared to 2021, the current ratio also declined significantly in 2023, indicating a potential reduction in the company's short-term solvency. In 2020, the current ratio was at 23.45, showcasing a substantial increase from the previous year and suggesting a strong ability to cover short-term obligations. However, in 2019, the ratio was relatively lower at 4.43, indicating a weaker liquidity position. Therefore, while the current ratio has experienced fluctuations, the company generally maintains a strong ability to cover its short-term obligations with current assets, although there have been some variations in recent years.