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. Zoom Video Communications's Cash Ratio for the quarter that ended in Jul. 2023 was 3.41.
Zoom Video Communications has a Cash Ratio of 3.41. It generally indicates that the company is able to cover all short-term debt and still have cash remaining.
The historical rank and industry rank for Zoom Video Communications's Cash Ratio or its related term are showing as below:
ZM'
s Cash Ratio Range Over the Past 10 Years
Min: 1.07 Med: 3.04 Max: 3.79
Current: 3.41
During the past 7 years, Zoom Video Communications's highest Cash Ratio was 3.79. The lowest was 1.07. And the median was 3.04.
ZM's Cash Ratio is ranked better than 86.76% of 2719
companies
in the Software industry
Industry Median: 0.78
vs ZM: 3.41
Zoom Video Communications Cash Ratio Historical Data
The historical data trend for Zoom Video Communications'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.
Zoom Video Communications Annual Data
Trend
Jan17
Jan18
Jan19
Jan20
Jan21
Jan22
Jan23
Cash Ratio
1.16
2.56
3.37
3.43
3.11
Zoom Video Communications Quarterly Data
Oct18
Jan19
Apr19
Jul19
Oct19
Jan20
Apr20
Jul20
Oct20
Jan21
Apr21
Jul21
Oct21
Jan22
Apr22
Jul22
Oct22
Jan23
Apr23
Jul23
Cash Ratio
2.96
2.72
3.11
3.04
3.41
Competitive Comparison
For the Software - Application subindustry, Zoom Video Communications'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.
Zoom Video Communications Cash Ratio Distribution
For the Software industry and Technology sector, Zoom Video Communications's Cash Ratio distribution charts can be found below:
* The bar in red indicates where Zoom Video Communications'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.
Zoom Video Communications Cash Ratio Calculation
The Cash Ratio measures a company's ability to meet its short-term obligations with its cash and near-cash resources.
Zoom Video Communications's Cash Ratio for the fiscal year that ended in Jan. 2023 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.
Zoom Video Communications (NAS:ZM) 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.
Zoom Video Communications Cash Ratio Related Terms
Thank you for viewing the detailed overview of Zoom Video Communications's Cash Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Zoom Video Communications (NAS:ZM) Business Description
Zoom Video Communications provides a communications platform that connects people through video, voice, chat, and content sharing. The company's cloud-native platform enables face-to-face video and connects users across various devices and locations in a single meeting. Zoom, which was founded in 2011 and is headquartered in San Jose, California, serves companies of all sizes from all industries around the world.
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