Synopsys Inc (SNPS)

Cash ratio

		Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Cash and cash equivalents	US$ in thousands	3,896,530	1,839,820	1,502,920	1,118,940	1,433,970	1,686,140	1,544,590	1,154,870	1,417,610	1,383,560	1,573,620	1,124,300	1,432,840	1,385,400	1,457,920	1,023,070	1,235,650	1,049,920	856,424	700,356
Short-term investments	US$ in thousands	153,869	154,431	156,780	154,490	151,639	148,443	150,846	147,050	147,913	147,599	146,901	147,748	147,949	144,773	—	—	0	—	—	—
Total current liabilities	US$ in thousands	2,650,120	2,534,950	2,508,350	2,644,510	2,985,450	2,729,980	2,748,680	2,725,000	2,774,500	2,545,860	2,462,660	2,471,660	2,413,480	2,334,640	2,255,700	2,171,380	2,139,920	2,056,280	2,054,200	2,055,740
Cash ratio		1.53	0.79	0.66	0.48	0.53	0.67	0.62	0.48	0.56	0.60	0.70	0.51	0.65	0.66	0.65	0.47	0.58	0.51	0.42	0.34

October 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($3,896,530K + $153,869K) ÷ $2,650,120K
= 1.53

The cash ratio is a liquidity ratio that 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.

Analyzing Synopsys Inc's cash ratio over the past years shows fluctuations in its liquidity position. As of October 31, 2024, the cash ratio stands at 1.53, indicating the company had $1.53 in cash and cash equivalents for every dollar of its short-term liabilities. This signifies a robust liquidity position and a strong ability to cover immediate financial obligations.

Comparing this to previous periods, we observe that the cash ratio has been volatile, ranging from 0.34 to 1.53. This variability suggests fluctuations in the company's cash holdings relative to its short-term liabilities over time. The cash ratio has shown an overall increasing trend since the beginning of 2020, indicating an improvement in the company's liquidity position.

It is important to monitor the cash ratio closely to assess Synopsys Inc's ability to manage its short-term obligations effectively and sustain its operations. A higher cash ratio provides a cushion during periods of financial uncertainty and indicates a stronger financial position.