Simulations Plus Inc (SLP)
Current ratio
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 39,341 | 130,372 | 146,790 | 139,313 | 129,092 |
| Total current liabilities | US$ in thousands | 12,069 | 11,987 | 7,735 | 11,574 | 5,506 |
| Current ratio | 3.26 | 10.88 | 18.98 | 12.04 | 23.45 |
August 31, 2024 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $39,341K ÷ $12,069K
= 3.26
The current ratio, which measures a company's ability to cover its short-term liabilities with its current assets, for Simulations Plus Inc has shown a declining trend over the past five years. The current ratio stood at 3.26 in August 31, 2024, indicating that the company had $3.26 in current assets for every $1 in current liabilities. This represents a significant decrease from the previous year when the current ratio was 10.88.
The substantial decrease in the current ratio from 2023 to 2024 suggests that the company may be facing challenges in managing its short-term liquidity. A current ratio below 1 would indicate that the company may have difficulties meeting its short-term obligations.
It is important to note that while a high current ratio is generally favorable as it indicates a strong ability to cover short-term liabilities, an excessively high current ratio could also suggest that the company is not efficiently using its current assets to generate revenue. Therefore, a downward trend in the current ratio should be carefully monitored by investors and analysts to assess the financial health and liquidity position of Simulations Plus Inc.
Peer comparison
Aug 31, 2024