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. Paychex's Cash Ratio for the quarter that ended in Feb. 2023 was 0.26.
Paychex has a Cash Ratio of 0.26. 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 Paychex's Cash Ratio or its related term are showing as below:
PAYX'
s Cash Ratio Range Over the Past 10 Years
Min: 0.01 Med: 0.13 Max: 2.95
Current: 0.26
During the past 13 years, Paychex's highest Cash Ratio was 2.95. The lowest was 0.01. And the median was 0.13.
PAYX's Cash Ratio is ranked worse than 67.75% of 1045
companies
in the Business Services industry
Industry Median: 0.56
vs PAYX: 0.26
Paychex Cash Ratio Historical Data
The historical data trend for Paychex'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.
* Premium members only.
Paychex Annual Data
Trend
May13
May14
May15
May16
May17
May18
May19
May20
May21
May22
Cash Ratio
0.08
0.15
0.21
0.21
0.23
Paychex Quarterly Data
May18
Aug18
Nov18
Feb19
May19
Aug19
Nov19
Feb20
May20
Aug20
Nov20
Feb21
May21
Aug21
Nov21
Feb22
May22
Aug22
Nov22
Feb23
Cash Ratio
0.24
0.23
0.26
0.27
0.26
Competitive Comparison
For the Staffing & Employment Services subindustry, Paychex'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.
Paychex Cash Ratio Distribution
For the Business Services industry and Industrials sector, Paychex's Cash Ratio distribution charts can be found below:
* The bar in red indicates where Paychex's Cash Ratio falls in comparison to its industry or sector. The grey bar indicates the Cash Ratio's extreme value range as defined by GuruFocus.
Paychex Cash Ratio Calculation
The Cash Ratio measures a company's ability to meet its short-term obligations with its cash and near-cash resources.
Paychex's Cash Ratio for the fiscal year that ended in May. 2022 is calculated as:
* 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.
Paychex (NAS:PAYX) 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.
Paychex Cash Ratio Related Terms
Thank you for viewing the detailed overview of Paychex's Cash Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Paychex is a leading provider of payroll, human capital management, and insurance solutions servicing small and midsize clients primarily in the United States. The company, established in 1979, services over 730,000 clients and pays over 1 in 12 U.S. private-sector workers. Alongside its traditional payroll services, Paychex offers HCM solutions such as benefits administration and time and attendance software, as well as human resources outsourcing and insurance agency services.
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