Bristol-Myers Squibb Co. (NYSE:BMY)

Current Ratio

The current ratio shows a general decline from 1.58 at the end of 2020 to 1.25 by the end of 2024. Despite a slight recovery in 2023 when it increased to 1.43, the overall trend indicates a gradual decrease in the company's short-term liquidity over the five-year period.

Quick Ratio

The quick ratio exhibits a similar downward trend, starting at 1.28 in 2020 and decreasing to 0.91 by 2024. Notably, in 2022 there is a significant drop to 0.87, followed by a modest recovery to 1.04 in 2023, and then a decline again in 2024. This pattern suggests reduced liquidity when excluding inventory from current assets.

Cash Ratio

The cash ratio reveals the most pronounced decline, falling sharply from 0.83 in 2020 to 0.46 in 2024. There is a partial recovery in 2023 to 0.55, but the overall trajectory indicates a decreasing level of readily available cash relative to current liabilities over the period.

The financial data reveals several key trends over the five-year period from 2020 to 2024. The current assets exhibit fluctuations with an initial increase followed by a decline, then a partial recovery, and a subsequent decrease. Specifically, current assets rose from $30,192 million in 2020 to $33,262 million in 2021, indicating improved liquidity or asset accumulation. However, there was a notable drop to $27,273 million in 2022, followed by a rise to $31,770 million in 2023, and another decrease to $29,780 million in 2024.

Current liabilities show a persistent upward trend across the same period. The liabilities increased steadily from $19,080 million in 2020 to $23,774 million in 2024, indicating growing short-term obligations. This increase in current liabilities outpaces the variations seen in current assets, suggesting rising pressure on short-term liquidity.

The current ratio, a key liquidity metric calculated as current assets divided by current liabilities, mirrors these movements and highlights trends in the company's ability to meet short-term obligations. The ratio declined from 1.58 in 2020 to 1.52 in 2021, decreased further to 1.25 in 2022, then improved slightly to 1.43 in 2023 before returning to 1.25 in 2024. This overall downward movement in the current ratio suggests a weakening short-term financial position, with a notable dip in 2022 and 2024 signaling potential liquidity constraints.

Current Assets

Experienced volatility, with peaks in 2021 and 2023, and troughs in 2022 and 2024.

Current Liabilities

Displayed a consistent and steady increase over the period, raising concerns about escalating short-term financial commitments.

Current Ratio

Declined overall, indicating a decreasing cushion of current assets against liabilities; maintained above 1 but trending towards lower liquidity over time.

In summary, while the company maintained a current ratio above 1, which generally indicates the ability to cover short-term liabilities, the declining trend accompanied by increasing liabilities and fluctuating assets suggest caution. Sustained increases in current liabilities alongside inconsistent asset levels could impact liquidity management and financial flexibility if current trends persist.

An analysis of the annual financial data reveals fluctuating liquidity trends over the observed five-year period.

Total Quick Assets

Total quick assets experienced an initial increase from 24,332 million US dollars in 2020 to 26,335 million US dollars in 2021, marking a growth phase. Subsequently, there was a marked decline to 19,139 million US dollars in 2022, indicating a reduction in the company's most liquid assets. In 2023, quick assets recovered somewhat to 23,201 million US dollars but decreased again in 2024 to 21,606 million US dollars, suggesting variability in the company's ability to maintain highly liquid resources.

Current Liabilities

Current liabilities showed a consistent upward trend throughout the period, increasing from 19,080 million US dollars in 2020 to 23,774 million US dollars in 2024. This steady increase indicates a rising level of short-term obligations, which could potentially pressure liquidity if not matched by equivalent asset growth.

Quick Ratio

The quick ratio declined from 1.28 in 2020 to 1.20 in 2021, reflecting a slight decrease in liquidity relative to current liabilities despite the growth in quick assets. The ratio then dropped more significantly to 0.87 in 2022, falling below the benchmark level of 1.0, which generally suggests insufficient liquid assets to cover current liabilities. A moderate improvement occurred in 2023 with the quick ratio rising to 1.04, briefly surpassing the 1.0 threshold. However, the ratio declined again to 0.91 in 2024, indicating renewed pressure on short-term liquidity.

Overall, the data depicts a challenging liquidity environment, with quick assets fluctuating and current liabilities consistently increasing. The quick ratio's trend highlights periods of potential liquidity risk, particularly in 2022 and 2024, when the ratio dipped below 1.0, signaling that quick assets were insufficient to cover current liabilities at those times. The partial recovery in 2023 suggests some temporary improvement, but the subsequent decline underscores the need for monitoring and managing liquidity positions carefully.

Total Cash Assets

The total cash assets exhibited a declining trend after rising initially. Beginning at 15,831 million US dollars in 2020, the figure increased to 16,966 million in 2021. However, a significant decrease followed, dropping to 9,253 million in 2022. Subsequently, there was a partial recovery to 12,280 million in 2023, but the value declined again to 10,859 million in 2024. Overall, this reflects considerable volatility in cash reserves over the period analyzed.

Current Liabilities

Current liabilities demonstrated a steadily increasing pattern throughout the period. Starting from 19,080 million US dollars in 2020, current liabilities rose each year, reaching 23,774 million by the end of 2024. The growth reflects a consistent upward pressure on short-term obligations.

Cash Ratio

The cash ratio, representing the ability to cover current liabilities with cash and cash equivalents, displayed a declining trend with minor fluctuations. It began at 0.83 in 2020, then gradually decreased to 0.78 in 2021. A sharp decline occurred in 2022, dropping to 0.42. A slight recovery was noted in 2023 to 0.55, followed by a new decrease to 0.46 in 2024. This suggests deteriorating short-term liquidity over the years, indicating a reduced capacity to cover short-term liabilities with available cash.