Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Biogen Inc., liquidity ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.83 | 1.84 | 1.72 | 2.32 | 2.34 | |
| Quick ratio | 1.34 | 1.32 | 1.43 | 1.83 | 1.78 | |
| Cash ratio | 0.88 | 0.70 | 0.92 | 1.07 | 1.10 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Current Ratio
- The current ratio demonstrated a general decline from 2.34 in 2017 to 1.72 in 2019, indicating a decrease in the company's short-term liquidity over this period. However, a slight recovery was observed in 2020 and 2021, with the ratio stabilizing around 1.83 to 1.84. This suggests the company improved its capacity to cover current liabilities with current assets after the initial decline.
- Quick Ratio
- The quick ratio followed a similar downward trend, decreasing from 1.78 in 2017 to 1.43 in 2019, which signals a reduced ability to pay off current obligations using its most liquid assets. The ratio further decreased to 1.32 in 2020 but showed a minor increase to 1.34 in 2021. Despite this slight improvement, the overall trend indicates a contraction in the company’s immediate liquidity position over the five-year period.
- Cash Ratio
- The cash ratio shows a consistent decline from 1.1 in 2017 to a low of 0.7 in 2020, suggesting a reduction in the most liquid assets relative to current liabilities. However, in 2021, the cash ratio increased to 0.88, indicating a modest recovery in cash and cash equivalents relative to short-term obligations. This pattern reflects some volatility in cash management but a partial restoration of liquidity in the latest period.
Current Ratio
Biogen Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 7,856,500) | 6,887,100) | 8,381,800) | 7,640,900) | 7,873,300) | |
| Current liabilities | 4,298,200) | 3,742,200) | 4,863,800) | 3,295,200) | 3,368,200) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 1.83 | 1.84 | 1.72 | 2.32 | 2.34 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.79 | 0.84 | — | — | — | |
| Amgen Inc. | 1.59 | 1.81 | — | — | — | |
| Bristol-Myers Squibb Co. | 1.52 | 1.58 | — | — | — | |
| Danaher Corp. | 1.43 | 1.86 | — | — | — | |
| Eli Lilly & Co. | 1.23 | 1.40 | — | — | — | |
| Gilead Sciences Inc. | 1.27 | 1.40 | — | — | — | |
| Johnson & Johnson | 1.35 | 1.21 | — | — | — | |
| Merck & Co. Inc. | 1.27 | 1.02 | — | — | — | |
| Pfizer Inc. | 1.40 | 1.35 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 3.56 | 3.63 | — | — | — | |
| Thermo Fisher Scientific Inc. | 1.50 | 2.13 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 4.46 | 4.33 | — | — | — | |
| Current Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.36 | 1.37 | — | — | — | |
| Current Ratio, Industry | ||||||
| Health Care | 1.24 | 1.24 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Current ratio = Current assets ÷ Current liabilities
= 7,856,500 ÷ 4,298,200 = 1.83
2 Click competitor name to see calculations.
- Current assets
- The current assets showed fluctuating trends over the five-year period. Beginning at 7,873,300 thousand USD in 2017, current assets slightly decreased to 7,640,900 thousand USD in 2018. In 2019, there was a notable increase to 8,381,800 thousand USD, followed by a significant decline to 6,887,100 thousand USD in 2020. The figure rebounded to 7,856,500 thousand USD in 2021, approaching the initial level observed in 2017.
- Current liabilities
- Current liabilities demonstrated variable movement during the period. Starting at 3,368,200 thousand USD in 2017, they slightly decreased in 2018 to 3,295,200 thousand USD. A marked rise occurred in 2019, reaching 4,863,800 thousand USD, followed by a decrease to 3,742,200 thousand USD in 2020. In 2021, current liabilities increased again to 4,298,200 thousand USD.
- Current ratio
- The current ratio declined substantially from 2.34 in 2017 to 1.72 in 2019, reflecting a decrease in short-term liquidity and potential tightening of the company's ability to cover current liabilities with current assets. Following 2019, the current ratio improved slightly to 1.84 in 2020 and remained relatively stable at 1.83 in 2021. This stability indicates a modest recovery in liquidity but still at a lower level compared to the beginning of the period.
- Overall insights
- The data reflect consistent fluctuations in both current assets and current liabilities, with a particularly sharp increase in liabilities in 2019 that exceeded the growth of assets, leading to a reduced current ratio. The subsequent years show some recovery in asset levels and a decrease, then moderate rise, in liabilities, coinciding with a slight improvement in liquidity ratios. The overall pattern suggests that the company experienced challenges in managing its short-term financial position around 2019 but has since stabilized its liquidity metrics, though not to the levels observed at the start of the period.
Quick Ratio
Biogen Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 2,261,400) | 1,331,200) | 2,913,700) | 1,224,600) | 1,573,800) | |
| Marketable securities | 1,541,100) | 1,278,900) | 1,562,200) | 2,313,400) | 2,115,200) | |
| Accounts receivable, net | 1,549,400) | 1,913,800) | 1,880,500) | 1,958,500) | 1,787,000) | |
| Due from anti-CD20 therapeutic programs | 412,300) | 413,500) | 590,200) | 526,900) | 532,600) | |
| Total quick assets | 5,764,200) | 4,937,400) | 6,946,600) | 6,023,400) | 6,008,600) | |
| Current liabilities | 4,298,200) | 3,742,200) | 4,863,800) | 3,295,200) | 3,368,200) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 1.34 | 1.32 | 1.43 | 1.83 | 1.78 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.56 | 0.60 | — | — | — | |
| Amgen Inc. | 1.06 | 1.30 | — | — | — | |
| Bristol-Myers Squibb Co. | 1.20 | 1.28 | — | — | — | |
| Danaher Corp. | 0.89 | 1.36 | — | — | — | |
| Eli Lilly & Co. | 0.80 | 0.85 | — | — | — | |
| Gilead Sciences Inc. | 0.95 | 1.08 | — | — | — | |
| Johnson & Johnson | 1.04 | 0.91 | — | — | — | |
| Merck & Co. Inc. | 0.73 | 0.58 | — | — | — | |
| Pfizer Inc. | 1.00 | 0.78 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 2.98 | 2.86 | — | — | — | |
| Thermo Fisher Scientific Inc. | 1.00 | 1.63 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 4.04 | 4.02 | — | — | — | |
| Quick Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.98 | 0.98 | — | — | — | |
| Quick Ratio, Industry | ||||||
| Health Care | 0.93 | 0.91 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 5,764,200 ÷ 4,298,200 = 1.34
2 Click competitor name to see calculations.
The financial data reveals specific trends in liquidity and short-term financial stability over the five-year period analyzed.
- Total quick assets
- Total quick assets increased from 6,008,600 thousand US dollars in 2017 to a peak of 6,946,600 thousand in 2019, indicating an improvement in highly liquid assets available. However, this was followed by a notable decline to 4,937,400 thousand in 2020, a significant drop compared to prior years. In 2021, this value moderately recovered to 5,764,200 thousand but remained below the 2019 peak level.
- Current liabilities
- Current liabilities demonstrated variability over the period. Initially, liabilities decreased slightly from 3,368,200 thousand in 2017 to 3,295,200 thousand in 2018, then sharply increased to 4,863,800 thousand by 2019. This sharp rise was followed by a reduction to 3,742,200 thousand in 2020, improving the short-term obligations position temporarily. The liabilities rose again in 2021 to 4,298,200 thousand, suggesting some volatility in short-term debt or obligations.
- Quick ratio
- The quick ratio, measuring the company's ability to cover its immediate liabilities with its most liquid assets, declined consistently from 1.78 in 2017 to a low of 1.32 in 2020, reflecting a weakening in liquidity. In 2021, there was a slight improvement to 1.34, but the ratio remained well below the levels observed in 2017 and 2018, signaling ongoing challenges in maintaining strong short-term financial health. The ratio values above 1 throughout the period indicate that quick assets were sufficient to cover current liabilities, although the narrowing margin suggests greater liquidity risk.
Overall, the data suggests a period of increasing liquidity and asset accumulation through 2019, followed by a deterioration in 2020 that partially recovered in 2021. Concurrently, current liabilities have fluctuated, with peaks that may have pressured liquidity. The declining quick ratio trend until 2020 highlights a reduction in the buffer available to meet short-term obligations, with only a minor recovery in the subsequent year.
Cash Ratio
Biogen Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 2,261,400) | 1,331,200) | 2,913,700) | 1,224,600) | 1,573,800) | |
| Marketable securities | 1,541,100) | 1,278,900) | 1,562,200) | 2,313,400) | 2,115,200) | |
| Total cash assets | 3,802,500) | 2,610,100) | 4,475,900) | 3,538,000) | 3,689,000) | |
| Current liabilities | 4,298,200) | 3,742,200) | 4,863,800) | 3,295,200) | 3,368,200) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.88 | 0.70 | 0.92 | 1.07 | 1.10 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.28 | 0.30 | — | — | — | |
| Amgen Inc. | 0.66 | 0.91 | — | — | — | |
| Bristol-Myers Squibb Co. | 0.78 | 0.83 | — | — | — | |
| Danaher Corp. | 0.32 | 0.82 | — | — | — | |
| Eli Lilly & Co. | 0.26 | 0.29 | — | — | — | |
| Gilead Sciences Inc. | 0.56 | 0.65 | — | — | — | |
| Johnson & Johnson | 0.70 | 0.59 | — | — | — | |
| Merck & Co. Inc. | 0.34 | 0.30 | — | — | — | |
| Pfizer Inc. | 0.73 | 0.47 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 1.45 | 1.33 | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.33 | 1.00 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 3.51 | 3.55 | — | — | — | |
| Cash Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.58 | 0.59 | — | — | — | |
| Cash Ratio, Industry | ||||||
| Health Care | 0.54 | 0.53 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 3,802,500 ÷ 4,298,200 = 0.88
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited fluctuations over the five-year period. Beginning at 3,689,000 US$ thousand in 2017, there was a slight decline in 2018 to 3,538,000 US$ thousand, followed by a significant increase to 4,475,900 US$ thousand in 2019. However, the amount decreased notably in 2020 to 2,610,100 US$ thousand before recovering to 3,802,500 US$ thousand in 2021. This pattern indicates variability in liquidity management and potential changes in cash inflows or investment strategies.
- Current Liabilities
- Current liabilities showed an overall increasing trend from 3,368,200 US$ thousand in 2017 to 4,298,200 US$ thousand in 2021, despite some fluctuations. A notable spike occurred in 2019, reaching 4,863,800 US$ thousand, followed by a reduction in 2020 to 3,742,200 US$ thousand, then rising again in 2021. These changes suggest variations in short-term debt or obligations, reflecting adjustments in operational or financing activities.
- Cash Ratio
- The cash ratio declined steadily from 1.1 in 2017 to 0.88 in 2021, with the lowest point at 0.7 in 2020. This downward trend implies a decreasing ability to cover current liabilities immediately with cash or cash equivalents. The ratio falling below 1 after 2018 signals reduced short-term liquidity cushion, which may reflect a strategic shift towards leveraging cash reserves or increased liabilities.