Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Palo Alto Networks Inc., liquidity ratios
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
- Current Ratio
- The current ratio exhibited a significant decline from 1.91 in 2020 to 0.91 in 2021, followed by a further reduction to 0.77 in 2022. It then stabilized somewhat, fluctuating slightly around the 0.78 to 0.89 range from 2023 to 2024, with a projected slight improvement to 0.94 in 2025. This trend indicates a decreasing ability to cover short-term liabilities with current assets over the observed period, although a mild recovery is anticipated in the most recent years.
- Quick Ratio
- The quick ratio mirrored the pattern of the current ratio, dropping sharply from 1.85 in 2020 to 0.88 in 2021, then decreasing further to 0.75 in 2022. It continued to stay below 1.0 in subsequent years, with a slight increase from 0.72 in 2023 to an expected 0.88 in 2025. This suggests that the company's liquid assets excluding inventories were less sufficient to meet immediate liabilities during the period, even though a gradual recovery trend is noticeable towards the end of the timeline.
- Cash Ratio
- The cash ratio showed a pronounced downward trend, beginning at a relatively strong 1.39 in 2020 and declining consistently each year to only 0.31 in 2023. There is a minor upward adjustment projected for 2024 and 2025, reaching 0.36 by the latter year. This decline reflects a reduced capacity to cover current liabilities solely with the most liquid assets, highlighting potential liquidity constraints over the term analyzed.
Current Ratio
Palo Alto Networks Inc., current ratio calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current assets | 7,522,800) | 6,849,700) | 6,048,000) | 6,414,900) | 4,647,300) | 5,129,200) | |
| Current liabilities | 7,988,000) | 7,682,700) | 7,737,500) | 8,306,300) | 5,116,700) | 2,691,700) | |
| Liquidity Ratio | |||||||
| Current ratio1 | 0.94 | 0.89 | 0.78 | 0.77 | 0.91 | 1.91 | |
| Benchmarks | |||||||
| Current Ratio, Competitors2 | |||||||
| Accenture PLC | — | 1.10 | 1.30 | 1.23 | 1.25 | 1.40 | |
| Adobe Inc. | — | 1.07 | 1.34 | 1.11 | 1.25 | 1.48 | |
| Cadence Design Systems Inc. | — | 2.93 | 1.24 | 1.27 | 1.77 | 1.86 | |
| CrowdStrike Holdings Inc. | 1.77 | 1.76 | 1.73 | 1.83 | 2.65 | 2.38 | |
| Datadog Inc. | — | 2.64 | 3.17 | 3.09 | 3.54 | 5.77 | |
| Fair Isaac Corp. | — | 1.62 | 1.51 | 1.46 | 0.99 | 1.29 | |
| International Business Machines Corp. | — | 1.04 | 0.96 | 0.92 | 0.88 | 0.98 | |
| Intuit Inc. | 1.36 | 1.29 | 1.47 | 1.39 | 1.94 | 2.26 | |
| Microsoft Corp. | 1.35 | 1.27 | 1.77 | 1.78 | 2.08 | 2.52 | |
| Oracle Corp. | 0.75 | 0.72 | 0.91 | 1.62 | 2.30 | 3.03 | |
| Palantir Technologies Inc. | — | 5.96 | 5.55 | 5.17 | 4.34 | 3.74 | |
| Salesforce Inc. | 1.06 | 1.09 | 1.02 | 1.05 | 1.23 | 1.08 | |
| ServiceNow Inc. | — | 1.10 | 1.06 | 1.11 | 1.05 | 1.21 | |
| Synopsys Inc. | — | 2.44 | 1.15 | 1.09 | 1.16 | 1.19 | |
| Workday Inc. | 1.90 | 1.97 | 1.75 | 1.03 | 1.12 | 1.04 | |
| Current Ratio, Sector | |||||||
| Software & Services | — | 1.20 | 1.40 | 1.43 | 1.68 | 1.92 | |
| Current Ratio, Industry | |||||||
| Information Technology | — | 1.24 | 1.41 | 1.37 | 1.55 | 1.71 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= 7,522,800 ÷ 7,988,000 = 0.94
2 Click competitor name to see calculations.
- Current Assets
- Current assets experienced fluctuations over the observed periods. Beginning at approximately 5.13 billion USD in mid-2020, the value decreased to about 4.65 billion USD by mid-2021. Subsequently, it rose significantly to around 6.41 billion USD in mid-2022, maintaining relatively high values with minor variations in the following years, reaching approximately 7.52 billion USD by mid-2025.
- Current Liabilities
- Current liabilities exhibited a marked upward trajectory throughout the periods. Starting at roughly 2.69 billion USD in mid-2020, there was a substantial increase to over 5.12 billion USD by mid-2021. The upward trend continued, reaching approximately 8.31 billion USD in mid-2022. The levels stabilized near the 7.7 to 8.0 billion USD range from mid-2023 to mid-2025.
- Current Ratio
- The current ratio demonstrated a declining trend from mid-2020 through mid-2022, dropping from 1.91 to 0.77. This indicates a weakening short-term liquidity position over that period. From mid-2022 onwards, a gradual improvement in the current ratio is apparent, increasing from 0.77 to 0.94 by mid-2025, yet the ratio remains below 1.0, suggesting current liabilities consistently exceeded current assets in recent years.
- Overall Analysis
- The data reveals increasing short-term obligations alongside a generally rising but volatile current asset base. Despite recent improvements in liquidity ratios, the company’s current liabilities remain significantly higher than its current assets for most of the observed timeframe, indicating potential strains on working capital management. The gradual recovery in the current ratio in later years suggests efforts to enhance liquidity, though a ratio under 1.0 warrants attention to the company’s ability to meet near-term obligations without additional financing or asset liquidation.
Quick Ratio
Palo Alto Networks Inc., quick ratio calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Cash and cash equivalents | 2,268,600) | 1,535,200) | 1,135,300) | 2,118,500) | 1,874,200) | 2,958,000) | |
| Short-term investments | 634,600) | 1,043,600) | 1,254,700) | 1,516,000) | 1,026,900) | 789,800) | |
| Accounts receivable, net of allowance for credit losses | 2,965,000) | 2,618,600) | 2,463,200) | 2,142,500) | 1,240,400) | 1,037,100) | |
| Short-term financing receivables, net | 714,600) | 725,900) | 388,800) | 111,300) | 79,000) | —) | |
| Short-term deferred contract costs | 419,500) | 369,000) | 339,200) | 317,700) | 276,500) | 206,000) | |
| Total quick assets | 7,002,300) | 6,292,300) | 5,581,200) | 6,206,000) | 4,497,000) | 4,990,900) | |
| Current liabilities | 7,988,000) | 7,682,700) | 7,737,500) | 8,306,300) | 5,116,700) | 2,691,700) | |
| Liquidity Ratio | |||||||
| Quick ratio1 | 0.88 | 0.82 | 0.72 | 0.75 | 0.88 | 1.85 | |
| Benchmarks | |||||||
| Quick Ratio, Competitors2 | |||||||
| Accenture PLC | — | 0.98 | 1.18 | 1.12 | 1.14 | 1.29 | |
| Adobe Inc. | — | 0.95 | 1.22 | 1.00 | 1.11 | 1.34 | |
| Cadence Design Systems Inc. | — | 2.53 | 1.02 | 1.02 | 1.47 | 1.60 | |
| CrowdStrike Holdings Inc. | 1.58 | 1.60 | 1.58 | 1.68 | 2.50 | 2.18 | |
| Datadog Inc. | — | 2.57 | 3.08 | 3.01 | 3.45 | 5.64 | |
| Fair Isaac Corp. | — | 1.52 | 1.43 | 1.37 | 0.91 | 1.19 | |
| International Business Machines Corp. | — | 0.90 | 0.82 | 0.76 | 0.69 | 0.83 | |
| Intuit Inc. | 0.63 | 0.71 | 1.25 | 1.17 | 1.65 | 2.04 | |
| Microsoft Corp. | 1.16 | 1.06 | 1.54 | 1.57 | 1.90 | 2.33 | |
| Oracle Corp. | 0.61 | 0.59 | 0.74 | 1.43 | 2.15 | 2.83 | |
| Palantir Technologies Inc. | — | 5.83 | 5.41 | 4.92 | 4.11 | 3.59 | |
| Salesforce Inc. | 0.93 | 0.96 | 0.90 | 0.93 | 1.11 | 0.95 | |
| ServiceNow Inc. | — | 1.02 | 1.00 | 1.06 | 1.01 | 1.16 | |
| Synopsys Inc. | — | 1.88 | 0.85 | 0.85 | 0.89 | 0.94 | |
| Workday Inc. | 1.80 | 1.87 | 1.66 | 0.96 | 1.07 | 0.95 | |
| Quick Ratio, Sector | |||||||
| Software & Services | — | 1.01 | 1.22 | 1.26 | 1.52 | 1.76 | |
| Quick Ratio, Industry | |||||||
| Information Technology | — | 0.96 | 1.12 | 1.09 | 1.30 | 1.47 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 7,002,300 ÷ 7,988,000 = 0.88
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibit a fluctuating trend over the analyzed periods. Starting at 4,990,900 thousand US dollars in 2020, there is a decrease in 2021 to 4,497,000 thousand. However, the figure rebounds significantly in 2022 to 6,206,000 thousand, followed by a decrease in 2023 to 5,581,200 thousand. Subsequently, total quick assets increase markedly again in 2024 and 2025, reaching 6,292,300 thousand and 7,002,300 thousand US dollars, respectively. This indicates an overall upward trend with some volatility in the interim years.
- Current Liabilities
- Current liabilities show a consistent and substantial increase throughout the periods. From 2,691,700 thousand US dollars in 2020, current liabilities nearly double in 2021 to 5,116,700 thousand. The upward trend continues significantly through 2022 at 8,306,300 thousand and remains relatively stable at high levels in 2023 and 2024, with slight fluctuations around 7,700,000 to 7,680,000 thousand US dollars. By 2025, current liabilities increase slightly again to 7,988,000 thousand. This persistent increase in current liabilities suggests a growing short-term obligation load.
- Quick Ratio
- The quick ratio shows a declining trend from 1.85 in 2020 to a low of 0.72 in 2023, illustrating a reduction in short-term liquidity relative to current liabilities. However, after 2023, the quick ratio improves modestly to 0.82 in 2024 and 0.88 in 2025. Despite the partial recovery, the ratio remains below 1.0 from 2021 onwards, indicating that quick assets have been consistently insufficient to cover current liabilities throughout most of the period analyzed. This suggests a potential liquidity risk, although the recent upward movement may imply some strengthening in liquidity position.
Cash Ratio
Palo Alto Networks Inc., cash ratio calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Cash and cash equivalents | 2,268,600) | 1,535,200) | 1,135,300) | 2,118,500) | 1,874,200) | 2,958,000) | |
| Short-term investments | 634,600) | 1,043,600) | 1,254,700) | 1,516,000) | 1,026,900) | 789,800) | |
| Total cash assets | 2,903,200) | 2,578,800) | 2,390,000) | 3,634,500) | 2,901,100) | 3,747,800) | |
| Current liabilities | 7,988,000) | 7,682,700) | 7,737,500) | 8,306,300) | 5,116,700) | 2,691,700) | |
| Liquidity Ratio | |||||||
| Cash ratio1 | 0.36 | 0.34 | 0.31 | 0.44 | 0.57 | 1.39 | |
| Benchmarks | |||||||
| Cash Ratio, Competitors2 | |||||||
| Accenture PLC | — | 0.26 | 0.50 | 0.45 | 0.52 | 0.67 | |
| Adobe Inc. | — | 0.75 | 0.95 | 0.75 | 0.84 | 1.09 | |
| Cadence Design Systems Inc. | — | 2.03 | 0.72 | 0.66 | 1.13 | 1.17 | |
| CrowdStrike Holdings Inc. | 1.25 | 1.29 | 1.28 | 1.42 | 2.22 | 1.85 | |
| Datadog Inc. | — | 2.25 | 2.58 | 2.48 | 2.94 | 5.09 | |
| Fair Isaac Corp. | — | 0.40 | 0.37 | 0.40 | 0.35 | 0.38 | |
| International Business Machines Corp. | — | 0.45 | 0.39 | 0.28 | 0.22 | 0.36 | |
| Intuit Inc. | 0.44 | 0.54 | 0.97 | 0.90 | 1.46 | 2.00 | |
| Microsoft Corp. | 0.67 | 0.60 | 1.07 | 1.10 | 1.47 | 1.89 | |
| Oracle Corp. | 0.34 | 0.34 | 0.44 | 1.12 | 1.93 | 2.50 | |
| Palantir Technologies Inc. | — | 5.25 | 4.93 | 4.48 | 3.83 | 3.33 | |
| Salesforce Inc. | 0.50 | 0.53 | 0.48 | 0.48 | 0.67 | 0.54 | |
| ServiceNow Inc. | — | 0.69 | 0.66 | 0.71 | 0.67 | 0.83 | |
| Synopsys Inc. | — | 1.53 | 0.53 | 0.56 | 0.65 | 0.58 | |
| Workday Inc. | 1.45 | 1.55 | 1.32 | 0.72 | 0.83 | 0.65 | |
| Cash Ratio, Sector | |||||||
| Software & Services | — | 0.59 | 0.79 | 0.82 | 1.11 | 1.33 | |
| Cash Ratio, Industry | |||||||
| Information Technology | — | 0.57 | 0.71 | 0.67 | 0.89 | 1.06 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 2,903,200 ÷ 7,988,000 = 0.36
2 Click competitor name to see calculations.
Over the observed periods, several notable trends emerge from the financial metrics presented.
- Total cash assets
- The total cash assets demonstrate volatility with an initial decline from 3,747,800 thousand US dollars in 2020 to 2,901,100 thousand in 2021. This is followed by a recovery in 2022 reaching 3,634,500 thousand, subsequently declining again in 2023 to 2,390,000 thousand. The figures then show moderate growth in 2024 and 2025, reaching 2,578,800 thousand and 2,903,200 thousand respectively. This pattern suggests fluctuating liquidity reserves, with a peak in 2020 and a trough around 2023 before partial rebound.
- Current liabilities
- Current liabilities exhibit a pronounced upward trend over the period. Beginning at 2,691,700 thousand US dollars in 2020, liabilities nearly double by 2021 to 5,116,700 thousand and continue rising sharply to 8,306,300 thousand in 2022. Although there is a slight reduction to 7,737,500 thousand in 2023, the level remains substantially elevated, with small variations thereafter, maintaining a range approximately between 7,682,700 and 7,988,000 thousand through 2024 and 2025. This signals increasing short-term obligations over time with a plateau at a high level after 2021.
- Cash ratio
- The cash ratio declines steadily from 1.39 in 2020 to a low of 0.31 in 2023, indicating a decreasing proportion of cash and cash equivalents relative to current liabilities. Marginal improvements appear in 2024 and 2025, with the ratio rising slightly to 0.34 and 0.36 respectively, yet the ratio remains below 0.40, suggesting relatively low liquidity coverage of short-term liabilities compared to the earlier period.
In summary, the data reflect a scenario where cash assets fluctuate but generally trend downward from the initial period to mid-term, while current liabilities experience significant growth and then stabilization at high levels. Consequently, liquidity measured by the cash ratio deteriorates markedly, implying a weakening capacity to cover short-term obligations strictly with cash and cash equivalents. Although there is a slight recovery in cash holdings and liquidity ratios towards the most recent periods, the overall pattern points to increased pressure on short-term financial flexibility.