The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Paychex's current ratio for the quarter that ended in Feb. 2023 was 1.27.
Paychex has a current ratio of 1.27. It generally indicates good short-term financial strength.
The historical rank and industry rank for Paychex's Current Ratio or its related term are showing as below:
PAYX'
s Current Ratio Range Over the Past 10 Years
Min: 1.07 Med: 1.23 Max: 7.39
Current: 1.27
During the past 13 years, Paychex's highest Current Ratio was 7.39. The lowest was 1.07. And the median was 1.23.
PAYX's Current Ratio is ranked worse than 67.76% of 1064
companies
in the Business Services industry
Industry Median: 1.73
vs PAYX: 1.27
Paychex Current Ratio Historical Data
The historical data trend for Paychex's Current 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
Current Ratio
1.11
1.17
1.23
1.25
1.25
Paychex Quarterly Data
May18
Aug18
Nov18
Feb19
May19
Aug19
Nov19
Feb20
May20
Aug20
Nov20
Feb21
May21
Aug21
Nov21
Feb22
May22
Aug22
Nov22
Feb23
Current Ratio
1.27
1.25
1.29
1.30
1.27
Competitive Comparison
For the Staffing & Employment Services subindustry, Paychex's Current Ratio, along with its competitors' market caps and Current 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 Current Ratio Distribution
For the Business Services industry and Industrials sector, Paychex's Current Ratio distribution charts can be found below:
* The bar in red indicates where Paychex's Current Ratio falls in comparison to its industry or sector. The grey bar indicates the Current Ratio's extreme value range as defined by GuruFocus.
Paychex Current Ratio Calculation
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
Paychex's Current 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) Current Ratio Explanation
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Paychex Current Ratio Related Terms
Thank you for viewing the detailed overview of Paychex's Current 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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