Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Boston Scientific Corp., liquidity ratios
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.51 | 1.48 | 1.82 | 0.97 | 0.76 | |
| Quick ratio | 0.76 | 0.87 | 0.89 | 0.42 | 0.33 | |
| Cash ratio | 0.24 | 0.45 | 0.47 | 0.04 | 0.03 |
Based on: 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), 10-K (reporting date: 2018-12-31).
- Current Ratio
- The current ratio shows a significant improvement from 0.76 at the end of 2018 to 1.82 in 2020, indicating enhanced short-term liquidity over this period. However, the ratio declined to 1.48 in 2021 and then slightly increased to 1.51 in 2022. Despite this decrease after 2020, the current ratio remained above 1.4, reflecting a solid ability to cover current liabilities with current assets.
- Quick Ratio
- The quick ratio also demonstrates substantial growth between 2018 and 2020, rising from 0.33 to 0.89. This increase suggests improved liquidity when excluding inventory from current assets. After peaking in 2020, the quick ratio experienced a minor decline to 0.87 in 2021 and further decreased to 0.76 in 2022, indicating a slight reduction in highly liquid assets in the most recent years but maintaining a moderate liquidity position.
- Cash Ratio
- The cash ratio exhibited minimal values in 2018 and 2019, at 0.03 and 0.04 respectively, pointing to limited cash and cash equivalents relative to current liabilities in those years. A pronounced increase occurred in 2020, reaching 0.47, signifying a notable increase in cash reserves. This elevated level was relatively maintained in 2021 at 0.45 but declined significantly to 0.24 in 2022. Although the cash ratio remained below one, the 2022 reduction may suggest tighter cash availability compared to the prior two years.
Current Ratio
Boston Scientific Corp., current ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 5,760) | 6,317) | 6,694) | 4,699) | 4,003) | |
| Current liabilities | 3,803) | 4,274) | 3,681) | 4,866) | 5,260) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 1.51 | 1.48 | 1.82 | 0.97 | 0.76 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Abbott Laboratories | 1.63 | 1.85 | 1.72 | — | — | |
| CVS Health Corp. | 0.94 | 0.88 | 0.91 | — | — | |
| Elevance Health Inc. | 1.40 | 1.47 | 1.55 | — | — | |
| Intuitive Surgical Inc. | 4.40 | 5.08 | 6.86 | — | — | |
| Medtronic PLC | 1.86 | 2.65 | 2.13 | — | — | |
| UnitedHealth Group Inc. | 0.77 | 0.79 | 0.74 | — | — | |
| Current Ratio, Sector | ||||||
| Health Care Equipment & Services | 1.07 | 1.11 | 1.10 | — | — | |
| Current Ratio, Industry | ||||||
| Health Care | 1.19 | 1.24 | 1.24 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= 5,760 ÷ 3,803 = 1.51
2 Click competitor name to see calculations.
- Current Assets
- Current assets increased substantially from 2018 to 2020, rising from 4003 million USD to 6694 million USD. After this peak, there was a decline in 2021 and 2022, with values decreasing to 6317 million USD and 5760 million USD respectively. Despite the reduction in the last two years, the level of current assets in 2022 remained higher than the starting point in 2018.
- Current Liabilities
- Current liabilities exhibited a downward trend overall during the period. Beginning at 5260 million USD in 2018, liabilities dropped to 3681 million USD by 2020. This was followed by a slight increase in 2021 to 4274 million USD, before decreasing again to 3803 million USD in 2022. The liabilities at the end of the period were notably lower than in 2018.
- Current Ratio
- The current ratio showed clear improvement over the time span. Initially below 1 at 0.76 in 2018, the ratio nearly reached parity in 2019 at 0.97. In 2020, it rose sharply to 1.82, indicating a significant enhancement in short-term liquidity. Although it decreased somewhat in the subsequent years, with ratios of 1.48 in 2021 and 1.51 in 2022, the levels remained comfortably above 1. This suggests an overall strengthening of the company's ability to cover its current obligations with current assets.
- Summary
- The financial data reflects a positive liquidity trend characterized by increasing current assets and decreasing current liabilities, especially notable until 2020. The current ratio improvements confirm better short-term financial health and capacity to meet current liabilities. Despite some fluctuations in asset levels and liabilities after 2020, the company's liquidity position at the end of 2022 remains stronger than at the start of the period analyzed.
Quick Ratio
Boston Scientific Corp., quick ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 928) | 1,925) | 1,734) | 217) | 146) | |
| Trade accounts receivable, net | 1,970) | 1,778) | 1,531) | 1,828) | 1,608) | |
| Total quick assets | 2,898) | 3,703) | 3,265) | 2,045) | 1,754) | |
| Current liabilities | 3,803) | 4,274) | 3,681) | 4,866) | 5,260) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.76 | 0.87 | 0.89 | 0.42 | 0.33 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Abbott Laboratories | 1.06 | 1.28 | 1.14 | — | — | |
| CVS Health Corp. | 0.62 | 0.55 | 0.53 | — | — | |
| Elevance Health Inc. | 1.27 | 1.33 | 1.42 | — | — | |
| Intuitive Surgical Inc. | 3.56 | 4.34 | 5.96 | — | — | |
| Medtronic PLC | 1.30 | 1.91 | 1.50 | — | — | |
| UnitedHealth Group Inc. | 0.70 | 0.72 | 0.68 | — | — | |
| Quick Ratio, Sector | ||||||
| Health Care Equipment & Services | 0.85 | 0.87 | 0.85 | — | — | |
| Quick Ratio, Industry | ||||||
| Health Care | 0.88 | 0.93 | 0.91 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 2,898 ÷ 3,803 = 0.76
2 Click competitor name to see calculations.
- Total quick assets
- The total quick assets exhibited a consistent increase from 2018 through 2021, starting at $1,754 million in 2018, rising to $2,045 million in 2019, then sharply increasing to $3,265 million in 2020, and reaching $3,703 million in 2021. However, in 2022, there was a notable decline to $2,898 million, indicating a reduction in the most liquid assets available by the end of that period.
- Current liabilities
- Current liabilities demonstrated a general decreasing trend over the five-year span. Beginning at $5,260 million in 2018, liabilities dropped to $4,866 million in 2019 and further decreased significantly to $3,681 million in 2020. There was a slight increase in 2021 to $4,274 million, which was followed by a decrease again to $3,803 million in 2022. Overall, the downward movement suggests an improvement in short-term obligations management.
- Quick ratio
- The quick ratio showed marked improvement from 2018 to 2020, increasing from 0.33 to 0.89, reflecting an enhancement in liquidity and ability to cover current liabilities with quick assets. The ratio remained relatively stable in 2021 at 0.87 but declined in 2022 to 0.76. Despite this decrease, the liquidity position in 2022 remained substantially better than in 2018 and 2019, indicating relatively stronger short-term financial health.
- Overall analysis
- There was a clear positive trend in quick assets and liquidity ratios up to 2021, accompanied by a reduction in current liabilities, which suggests improved liquidity and short-term financial stability during that period. The decline in quick assets and quick ratio in 2022, despite a continuing reduction in current liabilities compared to 2018 and 2019, points to a slight weakening in liquidity. This may signal the need to monitor quick asset levels to maintain adequate coverage of short-term obligations in future periods.
Cash Ratio
Boston Scientific Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 928) | 1,925) | 1,734) | 217) | 146) | |
| Total cash assets | 928) | 1,925) | 1,734) | 217) | 146) | |
| Current liabilities | 3,803) | 4,274) | 3,681) | 4,866) | 5,260) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.24 | 0.45 | 0.47 | 0.04 | 0.03 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Abbott Laboratories | 0.66 | 0.78 | 0.60 | — | — | |
| CVS Health Corp. | 0.23 | 0.18 | 0.18 | — | — | |
| Elevance Health Inc. | 0.86 | 0.95 | 1.04 | — | — | |
| Intuitive Surgical Inc. | 2.90 | 3.66 | 5.30 | — | — | |
| Medtronic PLC | 0.85 | 1.27 | 1.06 | — | — | |
| UnitedHealth Group Inc. | 0.36 | 0.36 | 0.33 | — | — | |
| Cash Ratio, Sector | ||||||
| Health Care Equipment & Services | 0.47 | 0.49 | 0.47 | — | — | |
| Cash Ratio, Industry | ||||||
| Health Care | 0.49 | 0.54 | 0.53 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 928 ÷ 3,803 = 0.24
2 Click competitor name to see calculations.
- Total cash assets
- There is a significant upward trend in total cash assets from 2018 to 2021, with values increasing from 146 million US dollars in 2018 to a peak of 1,925 million US dollars in 2021. However, this was followed by a substantial decline in 2022 to 928 million US dollars, indicating a reduction of over 50% from the previous year.
- Current liabilities
- Current liabilities show a general declining trend over the period analyzed. Starting from 5,260 million US dollars in 2018, current liabilities decreased steadily to 3,681 million US dollars in 2020. This was followed by a slight increase in 2021 to 4,274 million US dollars, then a decrease again in 2022 to 3,803 million US dollars, demonstrating an overall effort to reduce short-term obligations.
- Cash ratio
- The cash ratio experienced a marked improvement from 0.03 in 2018 to 0.47 in 2020, reflecting enhanced liquidity and the company's ability to cover current liabilities with cash and cash equivalents. This high liquidity level was largely maintained in 2021 at 0.45. Nevertheless, in 2022, the cash ratio decreased to 0.24, suggesting a reduction in liquidity, though the ratio remains significantly higher than the levels observed in 2018 and 2019.