Workday Inc (WDAY)
Liquidity ratios
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | |
|---|---|---|---|---|---|
| Current ratio | 1.90 | 1.97 | 1.75 | 1.03 | 1.12 |
| Quick ratio | 1.80 | 1.87 | 1.66 | 0.96 | 1.07 |
| Cash ratio | 1.45 | 1.55 | 1.32 | 0.72 | 0.83 |
Workday Inc's liquidity ratios provide insight into the company's ability to meet its short-term obligations.
1. Current Ratio: Workday's current ratio has fluctuated over the years, starting at 1.12 in January 2021 and reaching 1.90 in January 2025. While the current ratio is above 1 in all years, indicating that the company has more current assets than current liabilities, the downward trend from 2021 to 2022 followed by an upward trend until 2025 suggests improvements in short-term liquidity.
2. Quick Ratio: The quick ratio, which excludes inventory from current assets, shows a similar trend to the current ratio. Workday's quick ratio starts at 1.07 in January 2021 and increases to 1.80 by January 2025. This indicates that the company has a sufficient level of highly liquid assets to cover its short-term liabilities, with a notable improvement in liquidity over the years.
3. Cash Ratio: Workday's cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, also shows an upward trend from 2021 to 2025. The cash ratio starts at 0.83 in January 2021 and reaches 1.45 in January 2025, indicating a strengthening liquidity position over time.
Overall, Workday Inc's liquidity ratios demonstrate an improving liquidity position over the years, with the company having adequate short-term assets to cover its short-term obligations. This indicates that Workday has effective management of its short-term finances and is in a strong position to meet its immediate financial commitments.
See also:
Additional liquidity measure
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 73.57 | 74.54 | 98.55 | 79.32 | 74.44 |
The cash conversion cycle of Workday Inc has shown some fluctuations over the years based on the data provided. In January 2021, the company's cash conversion cycle was 74.44 days, indicating the average number of days it takes for Workday to convert its investments in inventory and other resources into cash flows from sales.
By January 2022, the cash conversion cycle increased to 79.32 days, suggesting that the company took longer to convert its resources into cash during that period. This trend continued into January 2023, with a significant increase to 98.55 days, indicating potential inefficiencies in the company's cash management and working capital processes.
However, by January 2024, the cash conversion cycle decreased to 74.54 days, showing some improvement in the company's ability to convert its resources into cash more efficiently. Further progress was seen in January 2025, where the cycle decreased slightly to 73.57 days, indicating a continued focus on optimizing cash flows and working capital management within the organization.
Overall, the fluctuation in Workday Inc's cash conversion cycle demonstrates the importance of monitoring and improving working capital efficiency to support the company's financial health and operational performance.