Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
Amgen Inc., liquidity ratios
| 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
| 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
| 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 $23,099 million, respectively. This indicates growing short-term obligations for the company, which may impact liquidity if not managed carefully.
- Quick Ratio
-
The quick ratio revealed a declining pattern over the five-year span, reflecting the relationship between liquid assets and current liabilities. The ratio decreased from 1.3 in 2020 to 1.06 in 2021, then further dropped below 1.0 to 0.95 in 2022. Although there was a slight recovery to 0.99 in 2023, it fell again to 0.81 in 2024. Overall, the quick ratio falling below 1.0 since 2022 signals a potential liquidity concern, indicating that quick assets are insufficient to cover current liabilities in the most recent years.
- Summary of Financial Health Trends
-
Despite the increase in total quick assets in recent years, the concurrent and more accelerated rise in current liabilities has resulted in a declining quick ratio. This suggests that the company’s short-term liquidity position has weakened over time. The reduction in the quick ratio below the critical threshold of 1.0 from 2022 onward implies heightened risk in covering immediate obligations solely with quick assets. While liquid assets have improved since 2021, liability growth outpaces this, which may necessitate strategic attention to liquidity management.
Cash Ratio
Amgen Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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.