Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Baxter International Inc., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
- Current Ratio
- The current ratio showed variability over the observed periods, with values generally fluctuating between approximately 1.6 and 2.7. The ratio peaked notably at 2.7 in mid-2013, indicating a period of relatively higher short-term liquidity. After this peak, the current ratio declined somewhat but remained mostly above 1.6, with occasional rises above 2.0 during 2015 and early 2016. This pattern suggests the company maintained a sound ability to cover its short-term liabilities with current assets across most quarters, though there were fluctuations possibly attributable to working capital management or seasonal factors.
- Quick Ratio
- The quick ratio demonstrated a similar trend to the current ratio but at lower levels, ranging mostly from 0.8 to 1.8. There was a conspicuous spike to 1.84 in mid-2013 and a secondary peak at 1.58 in late 2015 to early 2016, indicating improved liquidity excluding inventory during these periods. The lowest points hovered around 0.82 to 0.84, seen in various quarters in 2014 and early 2015. Overall, the quick ratio indicates a generally stable yet more conservative liquidity position compared to the current ratio, reflecting the company's capability to meet immediate obligations without relying on inventory sales.
- Cash Ratio
- The cash ratio showed more pronounced fluctuations. Starting near 0.47-0.48 in early 2012, it sharply increased to 1.33 in mid-2013, indicating a significant accumulation of cash and cash equivalents relative to current liabilities at that time. Subsequently, it declined to lower levels around 0.32-0.36 for much of 2014, reflecting reduced immediate cash reserves. Another substantial rise occurred in mid to late 2015 and early 2016, where the cash ratio peaked above 1.0 before declining again but remaining above 0.7. These variations highlight periods of strategic cash holding, possibly linked to liquidity management, capital expenditures, or other operational cash requirements.
Current Ratio
Baxter International Inc., current ratio calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current assets | 6,823) | 8,017) | 11,796) | 11,138) | 14,497) | 9,734) | 10,351) | 9,631) | 9,487) | 9,388) | 10,004) | 9,597) | 12,185) | 8,814) | 9,260) | 9,105) | 8,048) | 8,117) | ||||||
| Current liabilities | 3,723) | 3,823) | 5,750) | 5,981) | 6,312) | 6,074) | 6,042) | 5,990) | 5,795) | 5,645) | 5,906) | 4,996) | 4,516) | 4,778) | 4,759) | 4,458) | 4,870) | 4,857) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Current ratio1 | 1.83 | 2.10 | 2.05 | 1.86 | 2.30 | 1.60 | 1.71 | 1.61 | 1.64 | 1.66 | 1.69 | 1.92 | 2.70 | 1.84 | 1.95 | 2.04 | 1.65 | 1.67 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||||||||||||
| Abbott Laboratories | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Current ratio = Current assets ÷ Current liabilities
= 6,823 ÷ 3,723 = 1.83
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals fluctuations in key short-term liquidity measures over the observed periods.
- Current Assets
- The current assets exhibit noticeable volatility throughout the timeline. Initially, values oscillate moderately around the 8,000 to 10,000 million US dollar range. A peak occurs around mid-2015, reaching approximately 14,497 million US dollars, indicating a significant increase in liquidity or asset holdings during that quarter. Subsequently, a sharp decline is observed, dropping back below 7,000 million by mid-2016, representing a considerable contraction in current asset levels.
- Current Liabilities
- Current liabilities remain relatively stable with moderate fluctuations, most values staying within the 4,500 to 6,300 million US dollar range. Notable is the decrease toward the end of the series, where liabilities drop below 4,000 million by mid-2016, suggesting a reduction in short-term obligations that may reflect improved working capital management or debt repayment strategies.
- Current Ratio
- The current ratio shows variability but generally stays above 1.5, indicating that the company maintained a reasonable cushion of current assets over current liabilities throughout the periods. Peaks in the current ratio correspond with higher current assets or lower current liabilities, such as the increase to 2.7 around mid-2013 and the rise to above 2 in late 2015 and early 2016. The ratio slightly decreases toward the last reported quarter, though it remains above the critical threshold of 1, implying continued coverage of short-term liabilities by current assets.
Overall, the financial data suggests episodic strengthening and weakening of liquidity positions, with marked increases in current assets during certain quarters followed by subsequent declines. Current liabilities display a modest downward trend in later periods, enhancing liquidity ratios. Despite fluctuations, the current ratio consistently reflects an adequate ability to meet short-term obligations across the analyzed timeframe.
Quick Ratio
Baxter International Inc., quick ratio calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cash and equivalents | 2,630) | 2,211) | 2,213) | 1,970) | 6,680) | 2,530) | 2,925) | 2,078) | 1,866) | 2,049) | 2,733) | 2,376) | 5,989) | 2,689) | 3,270) | 3,191) | 2,353) | 2,272) | ||||||
| Accounts and other current receivables, net | 1,813) | 1,830) | 1,731) | 1,772) | 2,852) | 2,599) | 2,803) | 2,842) | 2,914) | 2,708) | 2,911) | 2,766) | 2,342) | 2,319) | 2,425) | 2,324) | 2,225) | 2,341) | ||||||
| Investment in Baxalta common stock | —) | 1,232) | 5,148) | 4,156) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Total quick assets | 4,443) | 5,273) | 9,092) | 7,898) | 9,532) | 5,129) | 5,728) | 4,920) | 4,780) | 4,757) | 5,644) | 5,142) | 8,331) | 5,008) | 5,695) | 5,515) | 4,578) | 4,613) | ||||||
| Current liabilities | 3,723) | 3,823) | 5,750) | 5,981) | 6,312) | 6,074) | 6,042) | 5,990) | 5,795) | 5,645) | 5,906) | 4,996) | 4,516) | 4,778) | 4,759) | 4,458) | 4,870) | 4,857) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Quick ratio1 | 1.19 | 1.38 | 1.58 | 1.32 | 1.51 | 0.84 | 0.95 | 0.82 | 0.82 | 0.84 | 0.96 | 1.03 | 1.84 | 1.05 | 1.20 | 1.24 | 0.94 | 0.95 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||||||||||||
| Abbott Laboratories | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 4,443 ÷ 3,723 = 1.19
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals fluctuating trends in key liquidity indicators over the observed periods. The quick assets and current liabilities demonstrate variable movements, influencing the quick ratio accordingly.
- Total Quick Assets
- The total quick assets display significant variability across quarters. Initially, there is a moderate range around 4,500 to 5,700 million US dollars in 2012. A notable increase occurs in the second quarter of 2013 when the assets jump to 8,331 million US dollars, marking the highest point in the early timeline. Subsequently, quick assets experience a decline and stabilize around 4,700 to 5,700 million US dollars through 2014. Another pronounced surge is observed in the first three quarters of 2015, peaking at 9,532 million US dollars in the second quarter, the highest value of the entire period. Towards 2016, the quick assets reduce sharply to approximately 4,400 million US dollars.
- Current Liabilities
- Current liabilities remain relatively stable but with some fluctuations. They mostly range between approximately 4,400 to 6,300 million US dollars from 2012 to 2015, reaching a peak around the fourth quarter of 2013 and the second quarter of 2015. A significant decrease occurs by the first two quarters of 2016, dropping to roughly 3,800 to 3,700 million US dollars, which is substantially lower than previous periods.
- Quick Ratio
- Reflecting the interplay between quick assets and current liabilities, the quick ratio follows a fluctuating pattern. It generally hovered close to 1.0 during most quarters between 2012 and early 2013, indicating a balanced liquidity position. There are periods with notable elevations such as in the second quarter of 2013 (1.84), mid to late 2015 (1.51 to 1.58), and early 2016 (1.38), suggesting improved short-term liquidity as quick assets significantly exceed current liabilities during those times. Conversely, the ratio dips below 1.0 in several quarters, including late 2013 through early 2015, showing moments when current liabilities slightly outpaced quick assets, which may indicate tighter liquidity conditions during those periods.
Overall, the company experienced considerable fluctuations in liquidity over the quarters, with intermittent strong liquidity positions characterized by high quick ratios corresponding to peaks in quick assets and reductions in current liabilities. The volatility suggests dynamic management or external factors influencing the short-term financial standing across the analyzed time horizon. The marked decrease in current liabilities coupled with a reduction in quick assets toward 2016 warrants further examination to understand the underlying causes and potential impacts on financial stability.
Cash Ratio
Baxter International Inc., cash ratio calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cash and equivalents | 2,630) | 2,211) | 2,213) | 1,970) | 6,680) | 2,530) | 2,925) | 2,078) | 1,866) | 2,049) | 2,733) | 2,376) | 5,989) | 2,689) | 3,270) | 3,191) | 2,353) | 2,272) | ||||||
| Investment in Baxalta common stock | —) | 1,232) | 5,148) | 4,156) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Total cash assets | 2,630) | 3,443) | 7,361) | 6,126) | 6,680) | 2,530) | 2,925) | 2,078) | 1,866) | 2,049) | 2,733) | 2,376) | 5,989) | 2,689) | 3,270) | 3,191) | 2,353) | 2,272) | ||||||
| Current liabilities | 3,723) | 3,823) | 5,750) | 5,981) | 6,312) | 6,074) | 6,042) | 5,990) | 5,795) | 5,645) | 5,906) | 4,996) | 4,516) | 4,778) | 4,759) | 4,458) | 4,870) | 4,857) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Cash ratio1 | 0.71 | 0.90 | 1.28 | 1.02 | 1.06 | 0.42 | 0.48 | 0.35 | 0.32 | 0.36 | 0.46 | 0.48 | 1.33 | 0.56 | 0.69 | 0.72 | 0.48 | 0.47 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||||||||||||
| Abbott Laboratories | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 2,630 ÷ 3,723 = 0.71
2 Click competitor name to see calculations.
The financial data reveals fluctuating trends in cash assets, current liabilities, and cash ratio over the examined periods.
- Total Cash Assets
- Cash assets display considerable volatility. Starting at 2,272 million US dollars at the beginning of the period, there is a peak observed in mid-2013 reaching nearly 6,000 million US dollars. This is followed by a notable drop towards early 2014, with values around 2,000 million US dollars. A subsequent sharp rise occurs again in mid to late 2015, with cash assets peaking above 7,300 million US dollars by the end of 2015. However, a decline is seen in the first half of 2016.
- Current Liabilities
- Current liabilities remain relatively stable but exhibit a slight upward trend in the early part of the timeframe, rising from approximately 4,857 million US dollars to over 6,300 million US dollars by mid-2015. After this peak, there is a discernible reduction in liabilities, falling to below 3,800 million US dollars in mid-2016, which marks the lowest point within the observed period.
- Cash Ratio
- The cash ratio, representing liquidity, mirrors the variability seen in cash assets. The ratio begins just below 0.5, improves significantly during mid-2013 to a high of 1.33, indicating a strong liquidity position at that time. Subsequently, the ratio declines through 2014, settling near 0.35 before sharply rising again in 2015 to levels above 1.0, reaching a peak of 1.28 at the end of 2015. The ratio decreases once more in early 2016 to around 0.7, indicating a moderate but reduced liquidity relative to current liabilities.
Overall, the trends suggest periods of strong liquidity driven by substantial increases in cash assets, particularly in mid-2013 and late 2015. The reductions in current liabilities during early 2016 also contribute to a more favorable liquidity position. However, these positive liquidity trends are interspersed with phases of diminished cash availability and higher liabilities, reflecting cyclical fluctuations in working capital management.