Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Moderna Inc., liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Current ratio | 3.42 | 2.73 | 1.76 | 1.43 | 7.89 | |
| Quick ratio | 3.15 | 2.29 | 1.52 | 1.37 | 7.74 | |
| Cash ratio | 2.85 | 2.01 | 1.18 | 1.05 | 7.71 |
Based on: 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), 10-K (reporting date: 2019-12-31).
The liquidity profile exhibits a sharp contraction in 2020, followed by a consistent and strong recovery through the end of 2023. A high degree of correlation is observed across all three liquidity metrics, suggesting that the organization's ability to cover short-term obligations is primarily driven by its cash position rather than other current assets such as inventory.
- Current Ratio
- A substantial decrease is noted between 2019 and 2020, with the ratio falling from 7.89 to 1.43. Following this decline, a steady upward trajectory is observed, increasing to 1.76 in 2021, 2.73 in 2022, and reaching 3.42 by December 31, 2023. This indicates a significant strengthening of the margin of safety for meeting current liabilities.
- Quick Ratio
- The quick ratio mirrors the movement of the current ratio, dropping from 7.74 in 2019 to 1.37 in 2020. A subsequent recovery is evident, with the ratio climbing to 1.52 in 2021, 2.29 in 2022, and 3.15 in 2023. The proximity of the quick ratio to the current ratio suggests that inventories represent a minimal portion of the current asset base.
- Cash Ratio
- The most conservative liquidity measure experienced a decline from 7.71 in 2019 to 1.05 in 2020. This was followed by a period of consistent growth, rising to 1.18 in 2021, 2.01 in 2022, and 2.85 in 2023. By the end of the period, the company maintained sufficient cash and cash equivalents to cover its current liabilities nearly three times over.
The convergence of these three ratios indicates a liquidity structure heavily weighted toward cash and cash equivalents. The volatility observed between 2019 and 2020, followed by the steady increase in all metrics, suggests a transition from an initial high-cash state to a period of operational expansion, ultimately resulting in a strengthened liquidity position by 2023.
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Current Ratio
Moderna Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 10,325) | 13,431) | 16,071) | 6,298) | 1,129) | |
| Current liabilities | 3,015) | 4,923) | 9,128) | 4,389) | 143) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 3.42 | 2.73 | 1.76 | 1.43 | 7.89 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.87 | 0.96 | 0.79 | — | — | |
| Amgen Inc. | 1.65 | 1.41 | 1.59 | — | — | |
| Bristol-Myers Squibb Co. | 1.43 | 1.25 | 1.52 | — | — | |
| Danaher Corp. | 1.68 | 1.89 | 1.43 | — | — | |
| Eli Lilly & Co. | 0.94 | 1.05 | 1.23 | — | — | |
| Gilead Sciences Inc. | 1.43 | 1.29 | 1.27 | — | — | |
| Johnson & Johnson | 1.16 | 0.99 | 1.35 | — | — | |
| Merck & Co. Inc. | 1.25 | 1.47 | 1.27 | — | — | |
| Pfizer Inc. | 0.91 | 1.22 | 1.40 | — | — | |
| Regeneron Pharmaceuticals Inc. | 5.69 | 5.06 | 3.56 | — | — | |
| Thermo Fisher Scientific Inc. | 1.75 | 1.48 | 1.50 | — | — | |
| Vertex Pharmaceuticals Inc. | 3.99 | 4.83 | 4.46 | — | — | |
| Current Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.27 | 1.30 | 1.36 | — | — | |
| Current Ratio, Industry | ||||||
| Health Care | 1.23 | 1.23 | 1.31 | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= 10,325 ÷ 3,015 = 3.42
2 Click competitor name to see calculations.
The analysis of liquidity metrics reveals a period of significant volatility followed by a trend of strengthening short-term financial solvency between 2019 and 2023. The liquidity profile shifted from an initial state of extreme excess to a more compressed operational baseline, eventually improving as short-term obligations were reduced more rapidly than liquid assets.
- Asset and Liability Dynamics
- Current assets experienced exponential growth from 2019 to 2021, peaking at 16,071 million USD. This expansion was accompanied by a simultaneous surge in current liabilities, which rose from 143 million USD in 2019 to 9,128 million USD in 2021. Following this peak, both metrics entered a downward trajectory, with assets decreasing to 10,325 million USD and liabilities falling more sharply to 3,015 million USD by the end of 2023.
- Current Ratio Trends
- The current ratio exhibited a sharp contraction between 2019 and 2020, falling from 7.89 to 1.43, indicating that liabilities grew at a disproportionately higher rate than assets during the initial scale-up phase. A subsequent recovery trend is observed from 2021 onward, with the ratio increasing to 1.76 in 2021, 2.73 in 2022, and reaching 3.42 by December 31, 2023.
- Liquidity Interpretation
- The consistent increase in the current ratio from 2021 through 2023 is primarily driven by the aggressive reduction of current liabilities. While current assets declined by approximately 36% from their 2021 peak, current liabilities decreased by approximately 67% over the same period. This divergence resulted in a significantly strengthened ability to cover short-term obligations, ending the period with a robust liquidity cushion.
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Quick Ratio
Moderna Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 2,907) | 3,205) | 6,848) | 2,624) | 236) | |
| Investments | 5,697) | 6,697) | 3,879) | 1,984) | 867) | |
| Accounts receivable, net | 892) | 1,385) | 3,175) | 1,391) | 5) | |
| Total quick assets | 9,496) | 11,287) | 13,902) | 5,998) | 1,108) | |
| Current liabilities | 3,015) | 4,923) | 9,128) | 4,389) | 143) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 3.15 | 2.29 | 1.52 | 1.37 | 7.74 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.63 | 0.69 | 0.56 | — | — | |
| Amgen Inc. | 0.99 | 0.95 | 1.06 | — | — | |
| Bristol-Myers Squibb Co. | 1.04 | 0.87 | 1.20 | — | — | |
| Danaher Corp. | 1.18 | 1.30 | 0.89 | — | — | |
| Eli Lilly & Co. | 0.52 | 0.62 | 0.79 | — | — | |
| Gilead Sciences Inc. | 1.06 | 0.99 | 0.95 | — | — | |
| Johnson & Johnson | 0.82 | 0.71 | 1.04 | — | — | |
| Merck & Co. Inc. | 0.68 | 0.93 | 0.73 | — | — | |
| Pfizer Inc. | 0.50 | 0.80 | 1.00 | — | — | |
| Regeneron Pharmaceuticals Inc. | 4.82 | 4.16 | 2.98 | — | — | |
| Thermo Fisher Scientific Inc. | 1.27 | 1.06 | 1.00 | — | — | |
| Vertex Pharmaceuticals Inc. | 3.60 | 4.46 | 4.04 | — | — | |
| Quick Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.85 | 0.91 | 0.98 | — | — | |
| Quick Ratio, Industry | ||||||
| Health Care | 0.90 | 0.93 | 1.00 | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 9,496 ÷ 3,015 = 3.15
2 Click competitor name to see calculations.
The liquidity position of the company underwent significant volatility between 2019 and 2023, characterized by a massive expansion of the balance sheet followed by a period of contraction and stabilization. While the quick ratio experienced a sharp decline in 2020, a consistent upward trajectory has been observed from 2021 through 2023, indicating a strengthening of the short-term solvency position.
- Quick Ratio Volatility and Recovery
- A substantial decrease in the quick ratio occurred between 2019 and 2020, falling from 7.74 to 1.37. This decline was driven by a disproportionate increase in current liabilities relative to the growth of quick assets. However, since 2020, the ratio has steadily recovered, increasing to 1.52 in 2021, 2.29 in 2022, and reaching 3.15 by December 31, 2023. This trend indicates a growing capacity to meet immediate financial obligations using only the most liquid assets.
- Dynamics of Quick Assets and Current Liabilities
- Total quick assets saw an aggressive expansion from 1,108 million USD in 2019 to a peak of 13,902 million USD in 2021, followed by a gradual decline to 9,496 million USD in 2023. Current liabilities followed a similar trajectory, peaking in 2021 at 9,128 million USD. Notably, the reduction in current liabilities between 2021 and 2023 was more pronounced than the decrease in quick assets, with liabilities falling by approximately 67% over this period. This accelerated deleveraging of short-term obligations is the primary driver behind the improved quick ratio observed in the latter years of the analysis.
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Cash Ratio
Moderna Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 2,907) | 3,205) | 6,848) | 2,624) | 236) | |
| Investments | 5,697) | 6,697) | 3,879) | 1,984) | 867) | |
| Total cash assets | 8,604) | 9,902) | 10,727) | 4,608) | 1,103) | |
| Current liabilities | 3,015) | 4,923) | 9,128) | 4,389) | 143) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 2.85 | 2.01 | 1.18 | 1.05 | 7.71 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.34 | 0.31 | 0.28 | — | — | |
| Amgen Inc. | 0.60 | 0.59 | 0.66 | — | — | |
| Bristol-Myers Squibb Co. | 0.55 | 0.42 | 0.78 | — | — | |
| Danaher Corp. | 0.71 | 0.71 | 0.32 | — | — | |
| Eli Lilly & Co. | 0.10 | 0.12 | 0.25 | — | — | |
| Gilead Sciences Inc. | 0.64 | 0.57 | 0.56 | — | — | |
| Johnson & Johnson | 0.50 | 0.42 | 0.70 | — | — | |
| Merck & Co. Inc. | 0.28 | 0.54 | 0.34 | — | — | |
| Pfizer Inc. | 0.27 | 0.54 | 0.73 | — | — | |
| Regeneron Pharmaceuticals Inc. | 3.17 | 2.46 | 1.45 | — | — | |
| Thermo Fisher Scientific Inc. | 0.58 | 0.50 | 0.33 | — | — | |
| Vertex Pharmaceuticals Inc. | 3.16 | 3.93 | 3.51 | — | — | |
| Cash Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.47 | 0.52 | 0.58 | — | — | |
| Cash Ratio, Industry | ||||||
| Health Care | 0.50 | 0.54 | 0.60 | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 8,604 ÷ 3,015 = 2.85
2 Click competitor name to see calculations.
The company's liquidity position underwent significant volatility between 2019 and 2023, characterized by an initial period of rapid scaling followed by a phase of liability reduction and liquidity stabilization.
- Total Cash Assets
- A period of aggressive growth occurred between 2019 and 2021, with cash assets increasing from 1,103 million US$ to a peak of 10,727 million US$. Following this peak, a gradual downward trend emerged, with assets decreasing to 9,902 million US$ in 2022 and further to 8,604 million US$ by the end of 2023.
- Current Liabilities
- Current liabilities experienced a massive surge from 143 million US$ in 2019 to a peak of 9,128 million US$ in 2021. However, a sharp reversal followed, with liabilities declining significantly to 4,923 million US$ in 2022 and continuing to drop to 3,015 million US$ in 2023.
- Cash Ratio
- The cash ratio exhibited a non-linear trajectory. After starting at an exceptionally high 7.71 in 2019, the ratio dropped sharply to 1.05 in 2020 as liabilities scaled rapidly. From 2021 onward, a consistent recovery trend is observed, with the ratio rising to 1.18 in 2021, 2.01 in 2022, and reaching 2.85 by the end of 2023.
The strengthening of the cash ratio in the latter years of the period is primarily driven by the aggressive reduction of current liabilities, which outpaced the gradual decline in total cash assets. This suggests a strategic shift toward a more conservative liquidity profile, ensuring that the company maintains a substantial cash buffer relative to its short-term obligations.
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