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XeroASX:XRO -3.57%75 Cash Ratio is 0.76 as of Mar. 2026, which is 83% below its 10-year median of 4.37. GuruFocus rates ASX:XRO with a GF Score™ of 75/100 and a GF Value™ of A$198.62 (Possible Value Trap). The stock has 6 warning signs investors should review. Among 2,813 Software companies, Xero ranks worse than 50.3% on this metric.
The Cash Ratio measures a company’s ability to meet its short-term obligations with cash and near-cash resources. It is calculated as a company's Cash, Cash Equivalents, Marketable Securities divides by its Total Current Liabilities. Xero's Cash Ratio for the quarter that ended in Mar. 2026 was 0.76.
Xero has a Cash Ratio of 0.76. It indicates that there are more current liabilities than Cash, Cash Equivalents, Marketable Securities, and the company does not have sufficient cash on hand to pay off its short-term debt.
The historical rank and industry rank for Xero's Cash Ratio or its related term are showing as below:
ASX:XRO'
s Cash Ratio Range Over the Past 10 Years
Min: 0.76 Med: 4.37 Max: 6.58
Current: 0.76
During the past 13 years, Xero's highest Cash Ratio was 6.58. The lowest was 0.76. And the median was 4.37.
ASX:XRO's Cash Ratio is ranked worse than 50.3% of 2813
companies
in the Software industry
Industry Median: 0.78
vs ASX:XRO: 0.76
Xero (ASX:XRO) Cash Ratio Explanation
The cash ratio is more conservative than other liquidity ratios, such as Quick Ratio and Current Ratio, because it only considers a company's most liquid resources. The numerator of cash ratio only considers Cash, Cash Equivalents and marketable securities. Other current assets, such as accounts receivable and inventories, are not included. The rationale is that these assets may require time to be transformed into cash, and the amount of money received is also uncertain.
The cash ratio shows a company’s ability to pay all current liabilities immediately without selling or liquidating other assets. Generally speaking, a higher cash ratio suggests the company has a stronger ability to cover its short-term debt. However, a high cash ratio could also indicate inefficient management: the company is inefficient in making full utilization of cash to invest protential profitable project. It may also suggest that the company is not confident about future profitability.
In general, the higher the cash ratio, the better the company's liquidity position.
Xero Cash Ratio Related Terms
Xero Cash Ratio Historical Data
* Premium members only.
The historical data trend for Xero's Cash Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Application subindustry, Xero's Cash Ratio, along with its competitors' market caps and Cash Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Xero Cash Ratio vs Software Industry
For the Software industry and Technology sector, Xero's Cash Ratio distribution charts can be found below:
* The bar in red indicates where Xero's Cash Ratio falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Xero (ASX:XRO) has a Cash Ratio of 0.76 as of Mar. 2026. Cashflow ratio is the ratio of Cash, Cash Equivalents, Marketable Securities to current liabilities. View historical data on Xero and its competitors. This is 83% below median its historical median of 4.37. Over the past decade, Xero's Cash Ratio has ranged from 0.76 to 6.58. According to the industry distribution chart, Xero ranks #1415 out of 2813 companies in the Software industry, placing it in the top 50.3%.
Is Xero's Cash Ratio too high?
Xero's current Cash Ratio of 0.76 is 83% below median its 10-year median of 4.37. Over the past 10 years, this metric has ranged from a low of 0.76 to a high of 6.58. The Software industry median Cash Ratio is 0.78. Xero's value of 0.76 is 2.6% below this industry median. Based on the distribution chart, Xero ranks #1415 out of 2813 companies in the Software industry, which is below the industry midpoint. Overall, Xero has a GF Score™ of 75/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Xero's Cash Ratio compare to UBER and SHOP?
According to the Software industry distribution chart, Xero ranks #1415 out of 2813 companies for Cash Ratio. This places Xero in the lower half of its industry. The industry median Cash Ratio is 0.78. Xero's value of 0.76 is 2.6% below this benchmark. Historically, Xero's own Cash Ratio has ranged from 0.76 to 6.58 over the past decade. While the company's 10-year median is 4.37 vs. the industry median of 0.78, Xero has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Cash Ratio for a Software company?
The median Cash Ratio among Software companies is 0.78, based on 2,813 companies in the industry. Companies in the top quartile (top 25%) have a Cash Ratio significantly above this median, while those in the bottom quartile fall well below. However, Cash Ratio should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Xero's current Cash Ratio of 0.76 is 2.6% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Cash Ratio mean?
A high Cash Ratio can signal that a stock is expensive relative to its fundamentals. Cashflow ratio is the ratio of Cash, Cash Equivalents, Marketable Securities to current liabilities. View historical data on Xero and its competitors. For the Software industry, the median Cash Ratio is 0.78 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Xero's current Cash Ratio is 0.76, which is 83% below median its own 10-year median of 4.37. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Xero stock overvalued right now?
Based on GuruFocus' analysis, Xero (ASX:XRO) is currently considered Possible Value Trap. The stock's GF Value™ is A$198.62, compared to a current price of A$68.27 — trading 65.6% below its estimated fair value. The current Cash Ratio is 0.76, which is 83% below median its 10-year median of 4.37 and 2.6% below the Software industry median of 0.78. Xero's overall GF Score™ is 75/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Cash Ratio calculated?
Cash Ratio is calculated from a company's financial statements. For Xero (ASX:XRO), the current Cash Ratio is 0.76 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Xero (ASX:XRO) Overvalued in 2026?
Based on GuruFocus' analysis, Xero stock appears to be undervalued.
The current stock price of A$68.27 is trading 65.6% below its estimated GF Value™ of A$198.62.
GuruFocus considers Xero to be Possible Value Trap.
Key valuation signals for ASX:XRO:
Cash Ratio: 0.76 (83% below median its 10-year median of 4.37)
GF Value™: A$198.62 vs. price of A$68.27 (65.6% below fair value)
Industry Position: 2.6% below the Software median (#1415 of 2813)
No single metric tells the full story. See the ASX:XRO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Xero is a technology company originating from New Zealand, providing cloud-based accounting software, primarily for small and midsized enterprises, or SMEs, and accounting practices. As a first mover in the space for cloud-based accounting software, Xero has grown quickly to achieve dominant market share in New Zealand and Australia, displacing legacy providers. Xero has also expanded beyond its home region toward other English-speaking countries, primarily the UK and the US.
75GF Score
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