Baxter International Inc. (NYSE:BAX)

Current Ratio

The current ratio experienced fluctuations over the five-year period, beginning at 1.78 in 2011. It increased to 1.95 in 2012, indicating an improvement in short-term liquidity. However, it then declined to 1.69 in 2013 and remained relatively stable at 1.71 in 2014. A significant improvement was noted in 2015, with the ratio rising to 2.05, suggesting enhanced capacity to cover current liabilities with current assets.

Quick Ratio

The quick ratio showed a similar pattern to the current ratio but with more pronounced variability. Starting at 1.1 in 2011, it increased moderately to 1.2 in 2012. A decline followed in 2013 and 2014, with ratios of 0.96 and 0.95 respectively, indicating a reduction in liquid asset coverage relative to current liabilities. In 2015, there was a notable rebound to 1.58, which points to a strengthened liquidity position excluding inventories.

Cash Ratio

The cash ratio demonstrated the most significant changes among the liquidity measures. It began at 0.6 in 2011, increased slightly to 0.69 in 2012, then decreased sharply to 0.46 in 2013 and remained close to that level at 0.48 in 2014. In 2015, the cash ratio surged to 1.28, more than doubling the previous year’s figure and indicating a substantial buildup of cash and cash equivalents to cover current liabilities.

Current Assets

The current assets exhibited a general upward trend from 2011 to 2015. The value increased steadily from 8,650 million US dollars in 2011 to 11,796 million US dollars in 2015, reflecting an increase of approximately 36% over the five-year period. This growth suggests improving liquidity and an expanding asset base available for meeting short-term obligations.

Current Liabilities

Current liabilities showed some fluctuations during the years but remained within a relatively stable range. Starting at 4,857 million US dollars in 2011, liabilities slightly decreased to 4,759 million in 2012, then rose to 5,906 million in 2013 and 6,042 million in 2014, before declining again to 5,750 million in 2015. Overall, there was a moderate increase in current liabilities over the period, indicating a degree of variability in short-term obligations.

Current Ratio

The current ratio displayed variability but an overall improvement by the end of the period. Beginning at 1.78 in 2011, it increased to 1.95 in 2012, then declined to 1.69 in 2013 and remained nearly stable at 1.71 in 2014. The ratio then improved significantly to 2.05 in 2015. This pattern indicates that the company's ability to cover its current liabilities with current assets was somewhat unstable mid-period but strengthened notably by 2015, achieving a healthier liquidity position.

Total Quick Assets

The total quick assets exhibited a general upward trend over the five-year period. Starting at $5,325 million in 2011, the value increased moderately to $5,695 million in 2012. It then slightly declined to $5,644 million in 2013 before rising again to $5,728 million in 2014. A significant jump occurred in 2015, with total quick assets reaching $9,092 million, indicating a substantial improvement in liquid asset holdings in that year.

Current Liabilities

Current liabilities showed some fluctuation throughout the period. The amount decreased from $4,857 million in 2011 to $4,759 million in 2012, suggesting reduced short-term obligations. However, liabilities increased notably to $5,906 million in 2013 and further to $6,042 million in 2014, reflecting a rise in short-term debts or payables. By 2015, there was a decline to $5,750 million, indicating some reduction in current liabilities compared to the previous two years.

Quick Ratio

The quick ratio demonstrated variability over the years. It started at 1.1 in 2011, improving slightly to 1.2 in 2012, which suggests a relatively stable liquidity position. There was a noticeable decline in 2013 and 2014, with the ratio dropping to 0.96 and 0.95 respectively, indicating that quick assets were just under or roughly equal to current liabilities, pointing to tightened liquidity. In 2015, the quick ratio rose significantly to 1.58, reflecting a strong improvement in the company's ability to cover immediate liabilities with liquid assets.

Summary of Trends

Overall, the data indicates a general strengthening of liquidity by the end of 2015, characterized by a substantial increase in total quick assets and a marked improvement in the quick ratio. Despite fluctuations in current liabilities, the company managed to enhance its short-term financial health, particularly evident in the last year of the period. The dip in liquidity measures during 2013 and 2014 may suggest temporary pressures or changes in working capital management, but these appear to have been addressed effectively by 2015.

The financial data reveals several significant trends over the analyzed period from 2011 to 2015.

Total Cash Assets

Total cash assets experienced moderate fluctuations initially, decreasing from 2,905 million US dollars in 2011 to 2,733 million in 2013, before a slight recovery to 2,925 million in 2014. A substantial increase was observed in 2015, with total cash assets rising sharply to 7,361 million US dollars. This indicates a strong improvement in liquidity resources in the final year of the period.

Current Liabilities

Current liabilities displayed a generally increasing trend from 4,857 million US dollars in 2011 to a peak of 6,042 million in 2014, followed by a decrease to 5,750 million in 2015. The rise in liabilities through 2014 suggests growing short-term financial obligations, which then saw a moderate reduction in the last year.

Cash Ratio

The cash ratio, representing cash assets relative to current liabilities, reflects the trends in the numerator and denominator. From 0.6 in 2011, it increased to 0.69 in 2012, indicating an improvement in liquidity. However, the ratio then declined to 0.46 in 2013 and slightly improved to 0.48 in 2014, indicating relatively weaker liquidity in those years due to rising liabilities and fluctuating cash assets. In 2015, the cash ratio more than doubled to 1.28, surpassing the benchmark of 1, which implies that the company held sufficient cash to cover its current liabilities comfortably.

Overall, the patterns indicate that liquidity was strained between 2012 and 2014, with cash assets not keeping pace with increasing current liabilities. The marked improvement in 2015 suggests a strategic effort to strengthen cash reserves and reduce liquidity risk.