Simulations Plus Inc (SLP)

Quick ratio

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Cash	US$ in thousands	57,523	51,567	36,984	49,207	11,434
Short-term investments	US$ in thousands	57,940	76,668	86,620	66,804	0
Receivables	US$ in thousands	10,201	13,787	9,851	7,422	5,027
Total current liabilities	US$ in thousands	11,987	7,735	11,574	5,506	4,783
Quick ratio		10.48	18.36	11.53	22.42	3.44

August 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($57,523K + $57,940K + $10,201K) ÷ $11,987K
= 10.48

The quick ratio of Simulations Plus Inc. has shown fluctuation over the past five years. The quick ratio measures the company's ability to meet its short-term liabilities using its most liquid assets. In 2023, the quick ratio decreased to 10.88 from 18.98 in 2022, signaling a potential decline in the company's ability to cover its short-term obligations with its liquid assets. However, the current ratio remains substantially higher than 1, indicating a strong ability to meet short-term liabilities. It is important to assess the reasons behind this decline to understand its potential impact on the company's financial health.