Synopsys Inc (SNPS)

Current ratio

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Total current assets	US$ in thousands	3,430,620	3,012,670	2,808,340	2,549,220	1,738,920
Total current liabilities	US$ in thousands	2,985,450	2,774,500	2,413,480	2,139,920	1,752,450
Current ratio		1.15	1.09	1.16	1.19	0.99

October 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $3,430,620K ÷ $2,985,450K
= 1.15

The current ratio is a key financial ratio used to assess a company's ability to meet its short-term obligations with its short-term assets. Synopsys, Inc.'s current ratio from October 31, 2019, to October 31, 2023, has fluctuated, as shown in the table below:

| Date | Current Ratio |
|-------------|---------------|
| Oct 31, 2019| 0.99 |
| Oct 31, 2020| 1.19 |
| Oct 31, 2021| 1.16 |
| Oct 31, 2022| 1.09 |
| Oct 31, 2023| 1.15 |

The current ratio measures a company's ability to pay off its short-term liabilities with its short-term assets. A current ratio above 1 indicates that a company's short-term assets exceed its short-term liabilities.

From the data provided, we can observe that Synopsys, Inc.'s current ratio has varied over the past five years. The company's current ratio was below 1 in October 31, 2019, potentially indicating a liquidity risk as its short-term liabilities exceeded its short-term assets. However, the current ratio improved in the following years, with a ratio of 1.19 in October 31, 2020, and 1.16 in October 31, 2021.

In October 31, 2022, the current ratio decreased to 1.09, but it increased again to 1.15 in October 31, 2023. While the company's current ratio has fluctuated, it generally remained above 1 during this period, a positive sign indicating the company's ability to meet its short-term obligations with its short-term assets.

In conclusion, Synopsys, Inc.'s current ratio has shown some variability over the past five years, but overall, it has remained above 1, suggesting that the company has had sufficient short-term assets to cover its short-term obligations. However, it would be beneficial to monitor this ratio over time to ensure the company's continued ability to meet its short-term liabilities.