Gilead Sciences Inc. (NASDAQ:GILD)

Current Ratio Analysis

The current ratio displayed moderate fluctuations over the periods analyzed, generally remaining above 1.0, indicating that the company maintained adequate short-term liquidity. The ratio started at 1.37 in the first quarter of 2021, followed by a slight decline toward the end of 2021, reaching 1.27. Subsequently, it rebounded in early 2022 to 1.48 but showed a downward trend through mid-2023, hitting a low of 1.02. From late 2023 onwards, the ratio exhibited a recovery, with noticeable improvement in 2024, peaking at 1.60 in the final quarter of that year before slightly tapering off in 2025. Overall, the current ratio suggests the company experienced some short-term liquidity compression around mid-2023 but showed resilience and strengthening liquidity toward the end of the period.

Quick Ratio Analysis

The quick ratio trends closely mirrored the current ratio but generally reflected lower values, consistent with its exclusion of inventory. Initial quarters of 2021 indicate relatively stable liquidity, ranging from 0.95 to 1.05. There was a noticeable dip in mid-2023, reaching a low of 0.78, which points to reduced immediate liquidity during this time. This was followed by volatility with partial recovery periods interspersed with declines, notably dropping to 0.69 in mid-2024. An upswing occurred toward the end of 2024 and into 2025, where the ratio rose above 1.0, signaling an improved ability to meet short-term liabilities without relying on inventory sales. The fluctuations indicate varying degrees of reliance on quick assets, with a challenging liquidity position in mid-2023 and mid-2024 but some recovery in later periods.

Cash Ratio Analysis

The cash ratio shows the most conservative liquidity measure, illustrating the company's capacity to cover liabilities using cash and cash equivalents alone. Throughout 2021 and early 2022, the ratio remained relatively stable around 0.54 to 0.64, suggesting a consistent cash buffer. However, a declining trend is observable in mid-2024, when the ratio dropped to a low of 0.26, signaling a notably reduced cash reserve relative to current liabilities at that time. Following this decline, there was a marked recovery, with the cash ratio rising to 0.83 by the last quarter of 2024. Into 2025, the ratio fluctuated moderately, remaining below 0.65 but maintaining somewhat improved levels compared to the mid-2024 trough. This pattern suggests the company experienced some cash liquidity tightening in mid-2024 but took steps to replenish cash reserves subsequently.

Overall Liquidity Insights

Across the three liquidity ratios analyzed, the company maintained a generally stable liquidity profile with occasional periods of strain, particularly around mid-2023 and mid-2024. The current ratio's higher values relative to the quick and cash ratios denote some dependence on less liquid current assets like inventory to cover short-term obligations. The quick ratio and cash ratio trends underline that the firm's most immediate liquidity slackened notably mid-period but improved towards the end of the timeframe. These dynamics may imply operational or market conditions impacting working capital management or cash flow timing, requiring attentive oversight to ensure continued financial flexibility.

Current Assets

Current assets exhibited moderate fluctuations over the observed periods. Starting at 13,278 million USD in March 2021, the value rose gradually to peak near 16,085 million USD by December 2023. Subsequently, a decline occurred in the first half of 2024, with values falling below 12,500 million USD in June 2024. However, a strong recovery followed later, reaching a high of 19,173 million USD by December 2024. Notably, the most recent periods show an increase in current assets, indicating improved liquidity.

Current Liabilities

Current liabilities showed a less consistent trend. Initially, the liabilities stood at 9,705 million USD in March 2021, climbing steadily to around 11,610 million USD by December 2021. This was followed by a decrease to 8,558 million USD in March 2022. Afterwards, liabilities increased again, peaking at 13,964 million USD in June 2023. A decline ensued until December 2024, followed by another rise, reaching approximately 12,298 million USD in September 2025. The fluctuations suggest changes in short-term obligations and possibly adjustments in working capital management.

Current Ratio

The current ratio began around 1.37 in early 2021, maintaining a relatively stable range slightly above 1.3 through the end of 2021. It increased to 1.48 in March 2022, reflecting higher asset coverage of liabilities, but then dipped to approximately 1.02 mid-2023, signaling a tightening liquidity position. Following this trough, the ratio gradually improved again, reaching 1.6 by December 2024 and remaining above 1.3 thereafter. These changes indicate variability in the company's short-term financial health, with periods of both stronger and weaker liquidity management.

Overall Insights

The data reveals a cyclical pattern in liquidity metrics with current assets and liabilities moving in somewhat opposite phases at times. Liquidity, as measured by the current ratio, experienced a notable dip in mid-2023, likely due to the sharp increase in current liabilities outpacing asset growth. Later periods show a recovery in liquidity, possibly due to strategic adjustments. The general improvement towards late 2024 and beyond suggests enhanced short-term financial stability. Monitoring of these indicators would be beneficial for ongoing management of working capital and financial flexibility.

Total Quick Assets

Total quick assets exhibited fluctuations throughout the period under review. Initially, the amount increased from approximately 9.6 billion USD to above 11 billion USD by the end of 2021. However, the early part of 2022 saw a decline to around 9.1 billion USD, followed by a recovery and growth peaking at over 14 billion USD by the end of 2024. The latest figures show a slight decrease but remain elevated compared to the starting point, indicating overall growth with intermittent volatility.

Current Liabilities

Current liabilities demonstrated a generally increasing trend, starting near 9.7 billion USD and rising variably over time. There was some decline in early 2022 but a resumed upward trajectory thereafter, peaking above 13 billion USD in early 2024 before slight moderation. By the last recorded quarter, liabilities were again close to 12.3 billion USD, illustrating a growing obligation load over the analyzed timeframe.

Quick Ratio

The quick ratio oscillated around the benchmark value of 1.0, indicating some variability in short-term liquidity. Early quarters maintained ratios close to or slightly above 1.0, signaling adequate liquidity levels. Mid-2023 dipped notably below 1.0 to 0.78, suggesting tighter liquidity at that time. Subsequently, the ratio improved, peaking at 1.2 towards the end of 2024, indicating stronger liquidity. The ratio slightly declined but remained near 1.0 thereafter, generally reflecting the company’s ability to cover current liabilities with quick assets, albeit with variable efficiency over time.

Overall Analysis

The data reveals an environment of fluctuating liquidity and growing current liabilities. Despite periodic declines, total quick assets showed an upward progression in the longer term. The quick ratio’s variability highlights intermittent liquidity pressures, particularly during mid-2023, but an overall maintenance of near or above par short-term financial health. The interplay between rising liabilities and fluctuating liquid assets necessitates continued monitoring to ensure sustained liquidity and financial flexibility.

The quarterly financial data reveals several key trends in liquidity and current liabilities over the observed periods.

Total Cash Assets

Total cash assets exhibited moderate fluctuations over the timeframe. Beginning at 5,666 million USD, the cash balance initially increased, peaking at 6,667 million USD in June 2023. Subsequently, there was notable volatility, with cash assets declining sharply to 2,772 million USD by June 2024, before rebounding significantly to 9,991 million USD by December 2024. The pattern suggests episodes of substantial cash generation or inflows followed by considerable outflows, indicating potential operational or financing activities influencing liquidity.

Current Liabilities

Current liabilities showed a generally rising trend with periodic variations. Starting at 9,705 million USD, the liabilities increased to 14,964 million USD by June 2023, indicating an accumulation of short-term obligations. From that point onward, liabilities fluctuated but remained elevated, reaching 12,298 million USD by September 2025. This persistent level of current liabilities may signal continued short-term financing needs or growing operational commitments.

Cash Ratio

The cash ratio, which measures the ability to cover current liabilities with cash and equivalents, generally declined across the periods. Initially standing at 0.58, the ratio dipped to a low of 0.26 in June 2024, reflecting the diminished cash balance relative to liabilities during that interval. Following this trough, the ratio recovered to 0.83 by December 2024, correlating with the surge in cash assets. The ratio then moderated to about 0.6 by September 2025. Overall, the cash ratio suggests fluctuations in liquidity strength, with periods of constrained immediate solvency mitigated by episodes of enhanced cash holdings.

In summary, the company experienced variable liquidity conditions characterized by significant swings in cash reserves and consistently elevated current liabilities. The fluctuating cash ratio underscores transient liquidity pressures, though recovery phases indicate effective management of cash resources to meet short-term obligations periodically. The interplay of these factors points to a dynamic financial environment requiring continuous monitoring of cash flows and liabilities to ensure ongoing operational stability.