Becton, Dickinson & Co. (NYSE:BDX)

Current Ratio

The current ratio exhibited a significant spike in the second and third quarters of 2017, reaching values above 5.5, which is notably higher compared to other periods. Before and after this spike, the ratio remained generally around or slightly above 1.0, indicating periods of moderate liquidity. From late 2018 through early 2020, the current ratio fluctuated close to or below 1.0, suggesting tighter short-term liquidity in this timeframe. Starting from mid-2020, there was a recovery trend, with the ratio increasing again to values ranging from approximately 1.3 to 1.9, reflecting strengthening liquidity towards early 2022.

Quick Ratio

The quick ratio follows a pattern similar to the current ratio, including a pronounced increase in the middle of 2017, peaking near 4.77. Outside of this anomaly, the quick ratio mostly stayed below 1.0, indicating limited immediately liquid assets compared to current liabilities. The period from late 2018 to early 2020 showed a dip to its lowest values around 0.4, pointing to constrained near-cash liquidity. From mid-2020 onward, there was a noticeable improvement, with the ratio moving upward to levels between approximately 0.6 and 1.1, suggesting enhanced liquidity conditions relative to prior years.

Cash Ratio

The cash ratio demonstrated substantial volatility, notably peaking concurrently with the other liquidity ratios in mid-2017 at values exceeding 4.2, which is unusually high. For most other periods, the ratio stayed well below 1.0, typically ranging between 0.1 and 0.5, indicating that cash and cash equivalents formed a smaller portion of current liabilities. A modest upward trend is apparent beginning in mid-2020, with the ratio increasing towards 0.5 to 0.7 in early 2021, but then showing some fluctuations thereafter. These variations suggest changes in cash holdings relative to short-term obligations, with a general improvement in cash liquidity during the latter part of the observed timeframe.

Current Assets

The current assets exhibit significant volatility over the observed periods. Starting at 5,187 million US dollars at the end of 2016, there is a marked surge reaching a peak of 18,633 million in the third quarter of 2017, followed by a sharp decline returning to a range between 6,600 and 10,000 million across subsequent quarters. From early 2018 onward, current assets generally fluctuate within a narrower band, with a moderate upward trend noticeable towards the first quarter of 2022, reaching 10,152 million US dollars.

Current Liabilities

Current liabilities display a fluctuating pattern throughout the timeline. They decrease substantially in early 2017, hitting a low point of 3,273 million in the second quarter of 2017, then ascend to a high of 7,216 million by the third quarter of 2018. Subsequent values oscillate moderately between approximately 5,600 and 7,700 million US dollars. Notably, there is a spike to 8,755 million in the first quarter of 2020 and a general downward adjustment in the following quarters, stabilizing around 6,600 to 6,700 million at the end of the period.

Current Ratio

The current ratio follows the volatility observed in current assets and liabilities. It peaks dramatically to values above 5.5 during mid-2017, correlating with the extraordinary elevation in current assets against lower liabilities. Following this anomalous peak, the ratio stabilizes mostly between 0.96 and 1.54 from 2018 through 2022, indicating a consistent balance between current assets and liabilities. A general improvement is apparent starting in the second quarter of 2020, with the ratio rising to values near or above 1.5, suggesting enhanced short-term liquidity.

Overall Trends and Insights

The data indicates a period of irregular short-term asset and liability changes around 2017, which may be due to non-recurring events or reclassifications impacting working capital components. Post-2017, values normalize with current assets and liabilities maintaining more stable levels, while the current ratio remains relatively steady, indicative of controlled liquidity management. The upward trend in the current ratio during 2020 and early 2022 suggests improved capacity to meet short-term obligations, possibly reflecting strategic financial management or operational efficiencies during these periods.

Trend in Total Quick Assets

The total quick assets exhibited significant fluctuation over the examined periods. Initially, from the end of 2016 through the first quarter of 2017, there was a dramatic increase, peaking at over 15,000 million US dollars mid-2017. However, this peak was short-lived, and quick assets sharply declined by late 2017, stabilizing around 3,000 million US dollars through 2018 and 2019. Starting in early 2020, total quick assets showed a gradual upward trend, exceeding 5,800 million US dollars by the end of 2020, though with some volatility observed across the following quarters into 2022.

Trend in Current Liabilities

Current liabilities demonstrated considerable volatility as well. Initially declining from late 2016 through mid-2017, these liabilities surged in late 2017 and 2018, reaching highs above 7,000 million US dollars. A peak occurred in early 2020 surpassing 8,700 million US dollars, followed by a reduction into mid-2020. Throughout 2021 and into early 2022, current liabilities remained relatively elevated, fluctuating between approximately 5,300 and 7,700 million US dollars, suggesting periods of increased financial obligations.

Quick Ratio Analysis

The quick ratio reflects the company's short-term liquidity position. It spiked unusually high in mid-2017, with values around 4.7, indicative of a temporary liquidity surplus possibly due to the earlier rise in quick assets or a decrease in current liabilities. However, post-2017, the ratio mostly remained below 1.0, generally fluctuating between 0.4 and 0.9 across subsequent periods. There was a gradual improvement in liquidity starting in early 2020, with the ratio exceeding 0.8 and even 1.12 at one point during 2021. Despite these improvements, the quick ratio remained below the ideal threshold of 1 in several periods, indicating that the company’s liquid assets were frequently insufficient to cover current liabilities without relying on inventory or other less liquid assets.

Insights and Financial Health Implications

The large fluctuations in total quick assets and current liabilities suggest episodes of considerable financial restructuring or operational changes affecting working capital. The exceptionally high quick ratio in 2017 may indicate an extraordinary or non-recurring event, while the predominantly sub-1.0 quick ratio values imply ongoing challenges in maintaining ample liquidity. The general upward trend in quick assets starting in 2020, alongside slight improvements in the quick ratio, may point toward enhanced liquidity management during this period. Nonetheless, the balance between quick assets and liabilities remains tight, warranting continued monitoring of short-term financial stability.

The analysis of the quarterly financial data reveals several key trends regarding liquidity and short-term financial management. The total cash assets exhibit marked volatility over the course of the observed periods. Beginning at a relatively low level, cash assets increased significantly in the quarters ending June and September 2017, reaching peaks above 14 billion US dollars. Subsequently, a decline followed, with cash levels fluctuating within a lower range through 2018 and 2019, generally staying below 1.5 billion.

From early 2020 onward, total cash assets demonstrated a clear upward trend, with pronounced increases during the second quarter of 2020 and maintaining elevated cash balances throughout 2020 and into the first quarter of 2022. This suggests enhanced liquidity reserves possibly in response to market uncertainties or strategic cash accumulation.

Current liabilities also show considerable variation across periods. Early periods in 2017 reflect moderate liabilities between approximately 3.3 billion and 6.1 billion US dollars. Later periods demonstrate an overall rising trend especially notable in the quarters ending September 2018 through December 2019, with liabilities climbing toward and surpassing 7 billion. In 2020, despite fluctuations, a pattern of decreased liabilities is observable, particularly by the third quarter, before increasing again into 2021 and early 2022. This volatility in current liabilities indicates dynamic short-term obligations that could be influenced by operational or financing activities.

The cash ratio, which compares cash assets to current liabilities and is an indicator of short-term liquidity, illustrates significant fluctuations aligned with changes in cash and liabilities. Extremely high cash ratios above 4 are noted during mid-2017, coinciding with peak cash levels and relatively lower liabilities. Thereafter, the ratio declines sharply and stabilizes mostly below 0.3 through late 2019. From early 2020, the cash ratio shows improvement, with values rising notably above 0.4 and reaching around 0.7 by the first quarter of 2021, before moderating somewhat yet remaining above earlier lows as of early 2022.

Overall, the data suggests periods of aggressive cash accumulation and high liquidity, particularly in 2017 and 2020, interspersed with phases of tighter liquidity. The current liabilities appear responsive to operational cycles or external conditions, influencing the cash ratio and reflecting the company's management focus on maintaining adequate liquidity relative to short-term obligations.

Total Cash Assets

Displayed significant volatility with a pronounced peak in mid-2017 and steady growth from early 2020 onward.

Current Liabilities

Varied across periods, with an increasing trend noted in late 2018 and late 2021, reflecting changing short-term obligations.

Cash Ratio

Experienced extreme highs in 2017, followed by a decline and stabilization, then improvement in 2020 indicating stronger liquidity position relative to liabilities.