Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Amgen Inc., liquidity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.14 | 1.26 | 1.65 | 1.41 | 1.59 | |
| Quick ratio | 0.73 | 0.81 | 0.99 | 0.95 | 1.06 | |
| Cash ratio | 0.36 | 0.52 | 0.60 | 0.59 | 0.66 |
Based on: 10-K (reporting date: 2025-12-31), 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).
The liquidity position of the company exhibits a generally declining trend across the five-year period from 2021 to 2025. All three liquidity ratios – current, quick, and cash – demonstrate decreases, suggesting a potential weakening in the company’s ability to meet its short-term obligations using its most liquid assets.
- Current Ratio
- The current ratio decreased from 1.59 in 2021 to 1.14 in 2025. While the ratio remained above 1.0 throughout the period, indicating a positive ability to cover current liabilities with current assets, the decline suggests a diminishing margin of safety. A notable decrease occurred between 2023 and 2024, from 1.65 to 1.26, and this downward momentum continued into 2025.
- Quick Ratio
- The quick ratio, which excludes inventory from current assets, followed a similar downward trajectory, moving from 1.06 in 2021 to 0.73 in 2025. This indicates a consistent reduction in the company’s ability to meet short-term obligations with its most liquid assets – cash, marketable securities, and accounts receivable. The decline from 0.95 in 2022 to 0.73 in 2025 is particularly pronounced.
- Cash Ratio
- The cash ratio, the most conservative liquidity measure, experienced the most significant decline, decreasing from 0.66 in 2021 to 0.36 in 2025. This suggests a substantial reduction in the proportion of current assets held as cash and cash equivalents. The decrease from 0.60 in 2023 to 0.36 in 2025 indicates an accelerated reduction in readily available funds.
Collectively, these trends suggest a strategic shift in asset allocation or a potential increase in short-term liabilities. Further investigation would be required to determine the underlying causes of these changes and their potential impact on the company’s financial health.
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Current Ratio
Amgen Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 29,057) | 29,030) | 30,332) | 22,186) | 19,385) | |
| Current liabilities | 25,489) | 23,099) | 18,392) | 15,687) | 12,184) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 1.14 | 1.26 | 1.65 | 1.41 | 1.59 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.67 | 0.66 | 0.87 | 0.96 | 0.79 | |
| Bristol-Myers Squibb Co. | 1.26 | 1.25 | 1.43 | 1.25 | 1.52 | |
| Danaher Corp. | 1.87 | 1.40 | 1.68 | 1.89 | 1.43 | |
| Eli Lilly & Co. | 1.58 | 1.15 | 0.94 | 1.05 | 1.23 | |
| Gilead Sciences Inc. | 1.55 | 1.60 | 1.43 | 1.29 | 1.27 | |
| Johnson & Johnson | 1.03 | 1.11 | 1.16 | 0.99 | 1.35 | |
| Merck & Co. Inc. | 1.54 | 1.36 | 1.25 | 1.47 | 1.27 | |
| Pfizer Inc. | 1.16 | 1.17 | 0.91 | 1.22 | 1.40 | |
| Regeneron Pharmaceuticals Inc. | 4.13 | 4.73 | 5.69 | 5.06 | 3.56 | |
| Thermo Fisher Scientific Inc. | 1.89 | 1.66 | 1.75 | 1.48 | 1.50 | |
| Vertex Pharmaceuticals Inc. | 2.90 | 2.69 | 3.99 | 4.83 | 4.46 | |
| Current Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.30 | 1.24 | 1.27 | 1.30 | 1.36 | |
| Current Ratio, Industry | ||||||
| Health Care | 1.23 | 1.21 | 1.23 | 1.23 | 1.31 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= 29,057 ÷ 25,489 = 1.14
2 Click competitor name to see calculations.
The current ratio exhibited fluctuations over the five-year period. Initially, the ratio decreased before increasing and then declining again. A review of the underlying components, current assets and current liabilities, reveals the drivers behind these changes.
- Overall Trend
- The current ratio began at 1.59 in 2021, decreased to 1.41 in 2022, increased to 1.65 in 2023, and subsequently declined to 1.26 in 2024 and further to 1.14 in 2025. This indicates a weakening liquidity position towards the end of the observed period.
- Current Assets
- Current assets increased from US$19,385 million in 2021 to US$22,186 million in 2022, representing a substantial rise. This growth continued into 2023, reaching US$30,332 million. However, current assets experienced a slight decrease in 2024 to US$29,030 million and remained relatively stable in 2025 at US$29,057 million.
- Current Liabilities
- Current liabilities demonstrated a consistent upward trend throughout the period. They rose from US$12,184 million in 2021 to US$15,687 million in 2022, US$18,392 million in 2023, US$23,099 million in 2024, and reached US$25,489 million in 2025. The rate of increase in current liabilities accelerated in the later years.
- Ratio Dynamics
- The initial decrease in the current ratio from 2021 to 2022 was driven by a proportionally larger increase in current liabilities compared to current assets. The subsequent improvement in 2023 resulted from a more significant increase in current assets. However, the declines observed in 2024 and 2025 are attributable to the continued and accelerating growth of current liabilities outpacing the relatively stable current asset levels.
The decreasing current ratio in the final two years suggests a potential increase in short-term financial risk, as the company has less current assets available to cover its immediate obligations. Continued monitoring of this trend and the underlying components is warranted.
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Quick Ratio
Amgen Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 9,129) | 11,973) | 10,944) | 7,629) | 7,989) | |
| Marketable securities | —) | —) | —) | 1,676) | 48) | |
| Trade receivables, net | 9,570) | 6,782) | 7,268) | 5,563) | 4,895) | |
| Total quick assets | 18,699) | 18,755) | 18,212) | 14,868) | 12,932) | |
| Current liabilities | 25,489) | 23,099) | 18,392) | 15,687) | 12,184) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.73 | 0.81 | 0.99 | 0.95 | 1.06 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.41 | 0.43 | 0.63 | 0.69 | 0.56 | |
| Bristol-Myers Squibb Co. | 0.94 | 0.91 | 1.04 | 0.87 | 1.20 | |
| Danaher Corp. | 1.25 | 0.83 | 1.18 | 1.30 | 0.89 | |
| Eli Lilly & Co. | 0.78 | 0.58 | 0.52 | 0.62 | 0.79 | |
| Gilead Sciences Inc. | 1.06 | 1.20 | 1.06 | 0.99 | 0.95 | |
| Johnson & Johnson | 0.69 | 0.78 | 0.82 | 0.71 | 1.04 | |
| Merck & Co. Inc. | 0.93 | 0.84 | 0.68 | 0.93 | 0.73 | |
| Pfizer Inc. | 0.69 | 0.74 | 0.50 | 0.80 | 1.00 | |
| Regeneron Pharmaceuticals Inc. | 3.28 | 3.86 | 4.82 | 4.16 | 2.98 | |
| Thermo Fisher Scientific Inc. | 1.36 | 1.14 | 1.27 | 1.06 | 1.00 | |
| Vertex Pharmaceuticals Inc. | 2.24 | 2.17 | 3.60 | 4.46 | 4.04 | |
| Quick Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.83 | 0.82 | 0.85 | 0.91 | 0.98 | |
| Quick Ratio, Industry | ||||||
| Health Care | 0.88 | 0.88 | 0.90 | 0.93 | 1.00 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 18,699 ÷ 25,489 = 0.73
2 Click competitor name to see calculations.
The quick ratio demonstrates a declining trend over the five-year period. Initially, the ratio stood at 1.06 in 2021, then decreased to 0.73 by 2025. This indicates a weakening ability to meet short-term obligations with highly liquid assets.
- Quick Ratio Trend
- The quick ratio experienced a decrease from 1.06 in 2021 to 0.95 in 2022, representing an initial decline. A slight recovery was observed in 2023, with the ratio increasing to 0.99. However, this was followed by more substantial decreases in 2024 and 2025, falling to 0.81 and 0.73 respectively.
- Asset and Liability Contributions
- Total quick assets increased from US$12,932 million in 2021 to US$18,699 million in 2025. Despite this absolute increase in liquid assets, the growth in current liabilities outpaced it. Current liabilities rose more significantly, from US$12,184 million in 2021 to US$25,489 million in 2025. This disparity is the primary driver of the declining quick ratio.
The consistent growth in current liabilities, coupled with a slower rate of increase in quick assets, suggests a potential increase in short-term financing needs or a shift in working capital management. The ratio falling below 1.0 in 2022 and continuing to decline warrants further investigation into the composition of both quick assets and current liabilities.
- Ratio Interpretation
- A quick ratio below 1.0 indicates that the entity may face challenges in covering its immediate liabilities with its most liquid assets. The decreasing trend suggests a growing vulnerability in this area. While not necessarily indicative of immediate financial distress, it signals a need to monitor short-term liquidity closely.
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Cash Ratio
Amgen Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 9,129) | 11,973) | 10,944) | 7,629) | 7,989) | |
| Marketable securities | —) | —) | —) | 1,676) | 48) | |
| Total cash assets | 9,129) | 11,973) | 10,944) | 9,305) | 8,037) | |
| Current liabilities | 25,489) | 23,099) | 18,392) | 15,687) | 12,184) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.36 | 0.52 | 0.60 | 0.59 | 0.66 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.12 | 0.14 | 0.34 | 0.31 | 0.28 | |
| Bristol-Myers Squibb Co. | 0.46 | 0.46 | 0.55 | 0.42 | 0.78 | |
| Danaher Corp. | 0.68 | 0.31 | 0.71 | 0.71 | 0.32 | |
| Eli Lilly & Co. | 0.21 | 0.12 | 0.10 | 0.12 | 0.25 | |
| Gilead Sciences Inc. | 0.65 | 0.83 | 0.64 | 0.57 | 0.56 | |
| Johnson & Johnson | 0.37 | 0.49 | 0.50 | 0.42 | 0.70 | |
| Merck & Co. Inc. | 0.51 | 0.48 | 0.28 | 0.54 | 0.34 | |
| Pfizer Inc. | 0.37 | 0.48 | 0.27 | 0.54 | 0.73 | |
| Regeneron Pharmaceuticals Inc. | 1.97 | 2.28 | 3.17 | 2.46 | 1.45 | |
| Thermo Fisher Scientific Inc. | 0.67 | 0.42 | 0.58 | 0.50 | 0.33 | |
| Vertex Pharmaceuticals Inc. | 1.71 | 1.72 | 3.16 | 3.93 | 3.51 | |
| Cash Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.41 | 0.45 | 0.47 | 0.52 | 0.58 | |
| Cash Ratio, Industry | ||||||
| Health Care | 0.43 | 0.46 | 0.50 | 0.54 | 0.60 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 9,129 ÷ 25,489 = 0.36
2 Click competitor name to see calculations.
The cash ratio exhibited a generally declining trend over the five-year period. While total cash assets increased from 2021 to 2024, the growth in current liabilities outpaced this increase, resulting in a decreasing cash ratio. A more pronounced decrease occurred between 2024 and 2025.
- Cash Ratio Trend
- The cash ratio began at 0.66 in 2021. It decreased to 0.59 in 2022 and remained relatively stable at 0.60 in 2023. A further decline to 0.52 was observed in 2024, followed by a more substantial drop to 0.36 in 2025. This indicates a weakening ability to cover current liabilities with only cash and cash equivalents.
- Cash Asset Evolution
- Total cash assets increased from US$8,037 million in 2021 to US$11,973 million in 2024, representing a significant rise over the period. However, cash assets decreased to US$9,129 million in 2025. Despite the overall increase from 2021 to 2024, the decrease in 2025 contributed to the lower cash ratio in that year.
- Current Liability Evolution
- Current liabilities demonstrated consistent growth throughout the period, increasing from US$12,184 million in 2021 to US$25,489 million in 2025. This continuous increase in short-term obligations, exceeding the growth in cash assets, is the primary driver of the declining cash ratio.
The decreasing cash ratio suggests a potential increase in short-term liquidity risk. While the company maintains a substantial amount of cash, its ability to meet immediate obligations solely with cash diminished over the observed period, particularly in the final year.
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