Stock Analysis on Net

Amgen Inc. (NASDAQ:AMGN)

$24.99

Analysis of Liquidity Ratios

Microsoft Excel

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Liquidity Ratios (Summary)

Amgen Inc., liquidity ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio
Quick ratio
Cash ratio

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


Current Ratio
The current ratio demonstrates a general declining trend over the five-year period, starting at 1.81 at the end of 2020 and decreasing to 1.26 by the end of 2024. There is a noticeable dip to 1.41 in 2022, followed by a slight recovery to 1.65 in 2023, and then a further decrease in 2024. This suggests a gradual reduction in the company's short-term liquidity and its ability to cover current liabilities with current assets.
Quick Ratio
The quick ratio, which excludes inventory from current assets, also exhibits a downward trend through the timeframe. Beginning at 1.30 in 2020, it declines each year to 0.81 in 2024. The consistent decrease indicates a declining ability to meet short-term obligations with the most liquid assets, signaling potentially tightening liquidity conditions.
Cash Ratio
The cash ratio shows the sharpest decline among the three liquidity measures, decreasing from 0.91 in 2020 to 0.52 in 2024. This ratio remains below 1 throughout and diminishes steadily each year, highlighting a reduction in cash and cash equivalents relative to current liabilities. This trend may point to increased reliance on receivables or other current assets rather than cash for meeting immediate obligations.

Current Ratio

Amgen Inc., current ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Current assets
Current liabilities
Liquidity Ratio
Current ratio1
Benchmarks
Current Ratio, Competitors2
AbbVie Inc.
Bristol-Myers Squibb Co.
Danaher Corp.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Current Ratio, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Current Ratio, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =

2 Click competitor name to see calculations.


Current Assets
The values of current assets showed some fluctuations over the observed periods. From 2020 to 2021, there was a decline from approximately 21.1 billion USD to 19.4 billion USD. However, a significant increase occurred in 2023, reaching around 30.3 billion USD, before a slight decrease to about 29.0 billion USD in 2024.
Current Liabilities
Current liabilities consistently increased throughout the period. Starting at roughly 11.7 billion USD in 2020, liabilities grew steadily each year, more than doubling to approximately 23.1 billion USD by 2024. This indicates a rising level of short-term obligations.
Current Ratio
The current ratio experienced a downward trend overall, beginning at 1.81 in 2020, declining to as low as 1.26 in 2024. Despite a temporary improvement in 2023 to 1.65, the ratio generally moved lower, suggesting a potential decrease in liquidity and a tighter margin to cover short-term liabilities with current assets.

Quick Ratio

Amgen Inc., quick ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Cash and cash equivalents
Marketable securities
Trade receivables, net
Total quick assets
 
Current liabilities
Liquidity Ratio
Quick ratio1
Benchmarks
Quick Ratio, Competitors2
AbbVie Inc.
Bristol-Myers Squibb Co.
Danaher Corp.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Quick Ratio, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Quick Ratio, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =

2 Click competitor name to see calculations.


Total Quick Assets

The total quick assets showed a fluctuating but generally increasing trend over the period. Starting at $15,172 million in 2020, the value declined to $12,932 million in 2021, indicating a reduction in liquid assets. However, from 2021 onwards, there was a consistent increase, reaching $14,868 million in 2022 and rising further to $18,212 million in 2023 and $18,755 million in 2024. This upward trend in quick assets over the last three years suggests an improvement in the company’s liquid asset base.

Current Liabilities

Current liabilities exhibited a steady increase throughout the analyzed years. Beginning at $11,653 million in 2020, current liabilities increased to $12,184 million in 2021 and then saw a more pronounced rise to $15,687 million in 2022. The upward trajectory continued considerably in 2023 and 2024, with liabilities reaching $18,392 million and $23,099 million, respectively. This indicates growing short-term obligations for the company, which may impact liquidity if not managed carefully.

Quick Ratio

The quick ratio revealed a declining pattern over the five-year span, reflecting the relationship between liquid assets and current liabilities. The ratio decreased from 1.3 in 2020 to 1.06 in 2021, then further dropped below 1.0 to 0.95 in 2022. Although there was a slight recovery to 0.99 in 2023, it fell again to 0.81 in 2024. Overall, the quick ratio falling below 1.0 since 2022 signals a potential liquidity concern, indicating that quick assets are insufficient to cover current liabilities in the most recent years.

Summary of Financial Health Trends

Despite the increase in total quick assets in recent years, the concurrent and more accelerated rise in current liabilities has resulted in a declining quick ratio. This suggests that the company’s short-term liquidity position has weakened over time. The reduction in the quick ratio below the critical threshold of 1.0 from 2022 onward implies heightened risk in covering immediate obligations solely with quick assets. While liquid assets have improved since 2021, liability growth outpaces this, which may necessitate strategic attention to liquidity management.


Cash Ratio

Amgen Inc., cash ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Cash and cash equivalents
Marketable securities
Total cash assets
 
Current liabilities
Liquidity Ratio
Cash ratio1
Benchmarks
Cash Ratio, Competitors2
AbbVie Inc.
Bristol-Myers Squibb Co.
Danaher Corp.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Vertex Pharmaceuticals Inc.
Cash Ratio, Sector
Pharmaceuticals, Biotechnology & Life Sciences
Cash Ratio, Industry
Health Care

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =

2 Click competitor name to see calculations.


Total Cash Assets
The total cash assets displayed a fluctuating but overall increasing trend over the five-year period. Beginning at $10,647 million in 2020, the cash assets decreased significantly in 2021 to $8,037 million. However, the subsequent years showed recovery and growth with figures rising to $9,305 million in 2022, $10,944 million in 2023, and reaching a peak of $11,973 million in 2024.
Current Liabilities
Current liabilities exhibited a consistent and substantial upward trajectory throughout the period. Starting from $11,653 million in 2020, liabilities increased year-over-year to $12,184 million in 2021, then saw a more pronounced rise to $15,687 million in 2022. This upward momentum accelerated further with current liabilities reaching $18,392 million in 2023 and culminating at $23,099 million in 2024.
Cash Ratio
The cash ratio, representing the company's ability to cover current liabilities with its most liquid assets, declined steadily over the whole period. It began close to parity at 0.91 in 2020 but fell sharply to 0.66 in 2021. The decline continued gradually to 0.59 in 2022, then remained relatively stable at 0.60 in 2023, before dropping further to a low of 0.52 in 2024. This trend indicates a weakening liquidity position relative to current liabilities.