Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
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).
The analysis of the liquidity ratios over the five-year period reveals varying trends in the company's short-term financial health.
- Current Ratio
- The current ratio demonstrated an increase from 1.72 in 2020 to a peak of 1.85 in 2021, indicating an improvement in the company's ability to cover its short-term liabilities with its current assets during that period. However, this ratio subsequently declined to 1.63 in 2022 and then stabilized around 1.64 to 1.67 in 2023 and 2024, suggesting a partial reduction in liquidity but maintaining a level generally above 1.5, which is considered adequate.
- Quick Ratio
- The quick ratio followed a similar pattern to the current ratio, increasing from 1.14 in 2020 to a high of 1.28 in 2021, implying an enhanced capacity to meet immediate obligations without relying on inventory. After 2021, the quick ratio decreased to 1.06 in 2022 and further fell to 1.00 in 2023, before a slight recovery to 1.05 in 2024. This decline points to a tightening of liquid assets relative to current liabilities, although the ratio remained close to or above 1, which indicates generally sufficient liquidity.
- Cash Ratio
- The cash ratio showed a distinct downward trend throughout the period. Starting at 0.60 in 2020, it rose to 0.78 in 2021, reflecting a stronger position of cash and cash equivalents against current liabilities in that year. From 2021 onwards, there was a consistent decrease to 0.66 in 2022, 0.53 in 2023, and a minor increase to 0.56 in 2024. This declining cash ratio suggests a reduced cash buffer to cover short-term liabilities, which may signify an increased reliance on receivables or inventory to support liquidity rather than immediate cash holdings.
Current Ratio
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 | ||||||
CVS Health Corp. | ||||||
Elevance Health Inc. | ||||||
Intuitive Surgical Inc. | ||||||
Medtronic PLC | ||||||
UnitedHealth Group Inc. | ||||||
Current Ratio, Sector | ||||||
Health Care Equipment & Services | ||||||
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
- Current assets exhibited an overall increasing trend from 20,441 million USD in 2020 to 25,224 million USD in 2022, indicating asset growth in the short-term segment. However, a decline occurred in 2023 to 22,670 million USD, followed by a moderate recovery to 23,656 million USD in 2024.
- Current Liabilities
- Current liabilities also followed a rising trajectory from 11,907 million USD in 2020 to 15,489 million USD in 2022, reflecting increasing obligations. Subsequently, liabilities decreased to 13,841 million USD in 2023 and slightly increased again to 14,157 million USD in 2024, suggesting some management of short-term debt pressures.
- Current Ratio
- The current ratio improved from 1.72 in 2020 to 1.85 in 2021, indicative of strengthened liquidity. However, it decreased to 1.63 in 2022 and remained relatively stable through 2023 and 2024 at approximately 1.64 and 1.67 respectively. This pattern suggests that although liquidity weakened from the 2021 peak, it stabilized at a level still above 1.5, commonly interpreted as a reasonable liquidity position.
- Summary of Liquidity Trends
- The data reflect rising current assets and liabilities through 2022, with liabilities increasing at a faster pace, resulting in a decline in the current ratio after 2021. Subsequent decreases in liabilities alongside slight recoveries in current assets in 2023 and 2024 contributed to the stabilization of the current ratio. Overall, liquidity remains adequate but shows sensitivity to fluctuations in liabilities and assets.
Quick Ratio
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 | ||||||
Investments, primarily bank time deposits and U.S. treasury bills | ||||||
Trade receivables, less allowances | ||||||
Total quick assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Quick ratio1 | ||||||
Benchmarks | ||||||
Quick Ratio, Competitors2 | ||||||
CVS Health Corp. | ||||||
Elevance Health Inc. | ||||||
Intuitive Surgical Inc. | ||||||
Medtronic PLC | ||||||
UnitedHealth Group Inc. | ||||||
Quick Ratio, Sector | ||||||
Health Care Equipment & Services | ||||||
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 fluctuations over the five-year period. There was an increase from 13,562 million US dollars in 2020 to a peak of 16,736 million in 2021, followed by a slight decrease to 16,388 million in 2022. Subsequently, total quick assets declined more significantly to 13,844 million in 2023 but rose again to 14,892 million in 2024. This pattern indicates some volatility in the company's liquid assets, with a general downward adjustment after 2021 before a modest recovery.
- Current Liabilities
- Current liabilities consistently increased from 11,907 million US dollars in 2020 to 15,489 million in 2022, representing a notable rise over the first three years. Subsequently, current liabilities decreased to 13,841 million in 2023 but increased slightly to 14,157 million in 2024. Overall, the liabilities show an upward trend with a slight dip in 2023, suggesting periods of higher short-term obligations followed by some reduction.
- Quick Ratio
- The quick ratio started at 1.14 in 2020 and rose to its highest point of 1.28 in 2021, indicating improved short-term liquidity and better coverage of current liabilities by quick assets. However, after 2021, the quick ratio declined to 1.06 in 2022, dropped further to 1.00 in 2023, and slightly increased to 1.05 in 2024. These changes reflect weakening liquidity conditions relative to obligations from 2022 onward, with the ratio remaining close to the critical threshold of 1, indicating tight liquid asset coverage of current liabilities.
Cash Ratio
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 | ||||||
Investments, primarily bank time deposits and U.S. treasury bills | ||||||
Total cash assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Cash ratio1 | ||||||
Benchmarks | ||||||
Cash Ratio, Competitors2 | ||||||
CVS Health Corp. | ||||||
Elevance Health Inc. | ||||||
Intuitive Surgical Inc. | ||||||
Medtronic PLC | ||||||
UnitedHealth Group Inc. | ||||||
Cash Ratio, Sector | ||||||
Health Care Equipment & Services | ||||||
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 exhibit fluctuations over the observed five-year period. There was a notable increase from 7,148 million US dollars in 2020 to 10,249 million US dollars in 2021. This level was nearly maintained in 2022 with a slight decrease to 10,170 million US dollars. However, a significant decline occurred in 2023, dropping to 7,279 million US dollars, followed by a moderate recovery to 7,967 million US dollars in 2024. This pattern suggests variability in liquidity management or cash inflows and outflows during the period.
- Current Liabilities
- Current liabilities demonstrate a rising trend over the timeframe. Starting at 11,907 million US dollars in 2020, liabilities grew steadily each year, reaching 15,489 million US dollars in 2022. Although there was a decrease to 13,841 million US dollars in 2023, the amount slightly increased again to 14,157 million US dollars in 2024. The overall upward movement indicates increasing short-term obligations, with a minor dip possibly reflecting improved liability management or payment cycles in 2023.
- Cash Ratio
- The cash ratio, representing liquidity by comparing cash assets to current liabilities, shows a declining trend over the period. It rose from 0.60 in 2020 to 0.78 in 2021, indicating stronger liquidity at that point in time. Following 2021, the ratio decreased over the next three years, falling to 0.66 in 2022, 0.53 in 2023, and slightly recovering to 0.56 in 2024. Despite the partial recovery in the final year, the decreasing ratio trend raises potential concerns about the company's ability to cover current liabilities solely with cash assets.
- Summary
- In summary, the liquid asset levels peaked in 2021 before declining, while current liabilities generally increased, resulting in a decreased cash ratio over time. This may suggest a tightening in liquidity and an increased reliance on obligations that could affect short-term financial flexibility. Management may need to monitor and possibly address cash reserves relative to liabilities to sustain financial stability.