Celgene Corp. (NASDAQ:CELG)

The analysis of liquidity ratios over the examined quarters reveals notable fluctuations in the company's ability to cover short-term liabilities with various levels of liquid assets.

Current Ratio

The current ratio displayed variability, generally oscillating between approximately 2.5 and 4.8. Early periods featured higher values, indicating relatively strong short-term liquidity positions with current assets exceeding current liabilities by more than twice or thrice. However, a downward trend appeared from early 2018, reaching a low near 1.5 in mid-2018. This was followed by a moderate recovery towards early 2019, suggesting some improvement in liquidity management or asset-liability balance.

Quick Ratio

Mirroring the current ratio's pattern but reflecting a stricter liquidity measure excluding inventories, the quick ratio also showed a decline beginning around early 2018, dropping to approximately 1.22 in mid-2018. Prior to this dip, values were consistently around or above 3, underscoring a solid liquidity position. The subsequent period indicated partial recovery, reaching levels near 3.2 by mid-2019, which may suggest enhanced capability to meet immediate obligations without relying on inventory liquidation.

Cash Ratio

The cash ratio exhibited the most pronounced volatility and lower absolute values relative to the other ratios, ranging mostly between 0.76 and 4.03. It notably decreased sharply from early 2018 to mid-2018, hitting its lowest point at roughly 0.76, signaling a reduced buffer of cash and cash equivalents against current liabilities. There was a moderate rebound observed towards mid-2019, increasing to above 2.0, indicating improved cash reserves in relation to short-term debts.

Overall, liquidity measures suggest that the company maintained strong liquidity in earlier periods, but encountered tighter short-term financial conditions starting in early 2018, reflected by diminished ratios across all three metrics. The partial recoveries in the subsequent quarters could indicate effective managerial actions to restore liquidity levels. Such trends may warrant continued monitoring to ensure sustainable short-term financial stability.

The analysis of the quarterly financial data reveals distinct trends in liquidity and working capital management over the observed periods.

Current Assets

Current assets demonstrate a generally increasing trend from early 2015 through the end of 2017, reaching a peak near the close of 2017. Subsequently, there is a sharp decline in early 2018, followed by a gradual recovery and growth into late 2019, with levels surpassing those seen in 2017 towards the end of the period. This pattern suggests fluctuations in short-term resources, with a notable dip in 2018 followed by an improvement in asset liquidity.

Current Liabilities

Current liabilities show a less consistent pattern compared to current assets. The values increase from the beginning of the dataset through 2017, with some volatility including a peak mid-2017 and a subsequent decline toward the end of 2017. The liabilities then generally increase again, reaching their highest values in late 2019. This rise in short-term obligations could indicate increasing operational or financing activities requiring more current funds.

Current Ratio

The current ratio, reflecting the ability to cover short-term liabilities with current assets, fluctuates significantly throughout the periods. It starts high in early 2015, dips mid-2015, rebounds through 2016 and 2017, and then declines sharply in early 2018, reaching its lowest point during mid-2018. After this trough, the ratio gradually improves but does not return to the earlier high levels by late 2019. This indicates variability in liquidity management, with a period of reduced short-term financial strength around 2018, followed by a recovery phase.

Overall, the data reveal periods of strong liquidity and asset buildup, interspersed with phases of increased liabilities and reduced liquidity coverage. The sharp dip in 2018 across all metrics suggests a significant shift in working capital dynamics, with recovery signs emerging thereafter. The increasing liabilities toward the end of the series imply a potential rise in short-term obligations that requires ongoing monitoring to maintain financial stability.

Total Quick Assets

Total quick assets demonstrate a fluctuating pattern across the quarters. Beginning at approximately $8.5 billion in the first quarter of 2015, values exhibit modest growth through 2015 and 2016, peaking near $13.96 billion at the end of 2017. However, there is a notable decline in the first two quarters of 2018, dropping to roughly $5.47 billion by mid-2018. Following this downturn, a recovery trend is visible, with total quick assets increasing steadily to about $13.27 billion by the third quarter of 2019.

Current Liabilities

Current liabilities exhibit an overall upward trend with periods of volatility. Starting near $2.1 billion in early 2015, liabilities increase with fluctuations, reaching a peak of about $4.5 billion in the second quarter of 2018. After this peak, the liabilities slightly decrease but remain elevated around the $4 billion range through 2018 and into 2019, culminating at approximately $5.0 billion by the third quarter of 2019. The pattern illustrates rising obligations with intermittent variability.

Quick Ratio

The quick ratio, indicating short-term liquidity, shows considerable variation over the analyzed period. It begins at a high of just above 4.0 in the first quarter of 2015, followed by fluctuations mostly between 3.0 and 4.0 until the end of 2017 where it reaches a peak close to 4.7. During 2018, the ratio declines sharply to a low around 1.22 in mid-2018, reflecting a reduction in liquidity relative to current liabilities. Subsequently, the ratio improves, rising steadily to approximately 3.2 by mid-2019, before a slight decline to 2.65 at the end of the third quarter of 2019. This indicates a period of reduced liquidity in 2018 with a recovery through 2019.

Overall Analysis

The data suggest a period of financial strength and growth in quick assets up to late 2017, followed by a pronounced liquidity contraction in 2018. Despite the shrinking asset base and rising current liabilities during 2018, the company effectively improved its liquidity position in 2019, as reflected by the recovering quick ratio and increasing quick assets. The rising current liabilities throughout the majority of the period indicate an expanding short-term obligation profile, which emphasizes the importance of maintaining sufficient liquid assets to mitigate liquidity risk.

The analysis of the quarterly financial data reveals several notable trends regarding liquidity and short-term obligations over the observed periods.

Total Cash Assets

Total cash assets exhibited fluctuations but generally showed an upward trend from early 2015 through the end of 2017, peaking at approximately 12.0 billion US dollars by December 31, 2017. Subsequently, there was a significant decline in the first half of 2018, with cash assets dropping below 4.0 billion. From mid-2018 onwards, cash assets demonstrated a steady recovery, reaching nearly 11.0 billion by the third quarter of 2019.

Current Liabilities

Current liabilities showed volatility throughout the periods but generally increased over time. Beginning at approximately 2.1 billion US dollars in the first quarter of 2015, liabilities rose to a peak of about 4.0 billion by the third quarter of 2017. After this period, liabilities fluctuated moderately, ranging mostly between 3.1 billion and 5.0 billion, with the highest point occurring in the third quarter of 2019.

Cash Ratio

The cash ratio, a liquidity metric measuring the ability to cover current liabilities with cash assets, varied significantly across the timeline. Early periods from 2015 through 2017 maintained elevated ratios generally above 2.5, with peaks surpassing 4.0 at the end of 2017, indicating strong liquidity. However, this ratio sharply declined in 2018, reaching a low below 0.8 in the second quarter. Following this trough, the cash ratio recovered gradually, stabilizing around values between 1.5 and 2.5 by mid-2019, which suggests moderate liquidity coverage of current liabilities during this phase.

Overall, the data point to a period of robust liquidity up to late 2017, followed by a notable reduction in cash reserves relative to current liabilities in 2018. Despite this contraction, there was consistent improvement in liquidity ratios and cash balances thereafter, reflecting a positive adjustment in financial positioning going into 2019.