Bristol-Myers Squibb Co. (NYSE:BMY)

Current Ratio

The current ratio demonstrates a fluctuating but overall slightly declining trend over the analyzed period. Initial values in early 2020 were around 1.66 but showed a consistent downward adjustment, reaching lows near 1.11 in mid-2024 before modestly recovering to 1.28 by the first quarter of 2025. This pattern indicates a gradual decrease in short-term liquidity, suggesting that current assets relative to current liabilities have weakened moderately but remain above 1, reflecting a continuing ability to cover short-term obligations.

Quick Ratio

The quick ratio follows a similar trajectory to the current ratio but with a more pronounced decline. Starting close to 1.38 in the first quarter of 2020, it drops substantially to a low of 0.77 in the fourth quarter of 2023 and mid-2024, before recovering slightly to 0.94 by March 2025. This indicates a decreasing availability of liquid assets excluding inventories, which may imply either a reduction in cash and equivalents or an increase in current liabilities not matched by liquid asset growth. The values generally fall below 1 in the latter quarters, suggesting tighter liquid asset coverage.

Cash Ratio

The cash ratio exhibits the most significant decline among the three liquidity measures. Starting at a relatively high 0.95 in early 2020, this ratio declines steadily to reach a low of 0.29 in the third quarter of 2024. The ratio then displays a partial rebound to 0.49 by March 2025. Such a decline signals a reduction in the company’s most liquid assets (cash and equivalents) relative to current liabilities. This trend points to increased reliance on non-cash current assets or more intensive use of cash resources over the period, potentially impacting immediate liquidity positions.

Overall Insights

Collectively, the liquidity ratios suggest a gradual tightening of short-term financial flexibility across the observed quarters. While the company maintains a current ratio above 1 throughout, signaling the ability to meet short-term obligations, the lower quick and cash ratios toward the later periods signal reduced liquidity cushions. The decreased cash ratio is particularly noteworthy as it underscores diminished cash reserves relative to liabilities, which could warrant closer attention to cash flow management. However, the observed partial recoveries in later quarters indicate some improvement efforts or adjustments in liquidity strategy.

The analysis of the quarterly financial data reveals several trends regarding liquidity and short-term financial health over the observed periods.

Current Assets

Current assets exhibit volatility across the quarters, with a noticeable decrease from the first quarter of 2020 through early 2021, dropping from 31,853 million USD to 27,111 million USD by March 2021. Subsequently, there is a general recovery trend, peaking at 33,770 million USD in December 2023. In the most recent quarters, current assets show moderate fluctuations but remain relatively stable, ending at 30,783 million USD by March 2025.

Current Liabilities

Current liabilities demonstrate a fluctuating pattern throughout the periods. From March 2020 (19,232 million USD), liabilities increase sharply around mid-2020, reaching over 23,421 million USD by June 2020, then generally fluctuate within the range of 18,000 to 24,000 million USD. The levels peak near the end of 2023 and early 2024, particularly at 25,822 million USD in September 2024 before slightly declining to 24,070 million USD by March 2025.

Current Ratio

The current ratio, a key indicator of short-term liquidity, reflects these asset and liability trends. Starting strong at 1.66 in March 2020, it dips below 1.5 during mid-2020 quarters. While partial recovery occurs, the ratio trends downward starting 2022, dropping to its lowest point at 1.11 in June 2024. Despite minor rebounds to around 1.28 by March 2025, the overall trend indicates a weakening liquidity position over the later periods.

Overall, the data suggests that while current assets have demonstrated resilience with periods of recovery, current liabilities have generally increased or maintained at elevated levels, exerting pressure on the company’s liquidity. This is evidenced by the declining current ratio over time, which points towards a gradual decrease in the company's ability to cover short-term obligations with current assets. The recent stabilization of the current ratio near 1.25 may indicate a potential halt in this decline, but the liquidity position remains less robust compared to the earlier quarters in 2020.

Total Quick Assets

The total quick assets exhibited significant fluctuations over the analyzed period. Starting at $26,612 million in March 2020, the figure peaked at $29,513 million in June 2020 before experiencing a notable decline towards the end of 2020, reaching $24,332 million in December 2020. In 2021, the quick assets showed moderate recovery, particularly between June and December, climbing to $26,335 million. However, a downward trend resumed through most of 2022, bottoming at $18,640 million in September 2022. A modest increase was observed at the end of 2022 and into early 2023. The year 2023 displayed further volatility with a nadir in September at $17,989 million, followed by a rebound to $23,201 million by December. Entering 2024, the quick assets again declined initially but recovered somewhat by March 2025, ending at $22,583 million. Overall, quick assets showed cyclical patterns with periods of both recovery and decline.

Current Liabilities

Current liabilities revealed a generally increasing trend over the period. Beginning at $19,232 million in March 2020, liabilities rose sharply to $23,421 million by June 2020. Following some short-term fluctuations, including a decrease to $17,330 million in March 2021, liabilities steadily increased throughout the subsequent years. By December 2021, current liabilities were $21,868 million, climbing further to $23,890 million at the end of 2022. The upward trend continued into 2023 and 2024, culminating in a high of $24,070 million in March 2025. The increase reflects a marked expansion in short-term obligations over the timeframe, with occasional minor pullbacks.

Quick Ratio

The quick ratio exhibited a downward trajectory overall, highlighting decreased short-term liquidity relative to current liabilities. Initially, the ratio was robust at 1.38 in March 2020 but dropped to 1.16 by June 2021, with some oscillations in between. The ratio remained near or just above 1.0 through most of 2021 and early 2022 but dipped below 1.0 starting mid-2022, reaching a low point of 0.77 in September 2023. Although some recovery occurred towards the end of 2023 and into 2025, lifting the ratio to 0.94 by March 2025, it stayed below the initial levels. The persistent drop below 1.0 for extended periods suggests increased liquidity risk and greater difficulty covering current liabilities instantaneously with quick assets during those times.

Summary Insights

The analysis reveals a pattern of fluctuating quick assets contrasted with steadily mounting current liabilities. This divergence contributed to the observed deterioration in the quick ratio, signaling potential challenges in maintaining short-term financial stability. While occasional recoveries in quick assets and the quick ratio provide some cushioning, the overall trend indicates heightened liquidity pressure. It would be prudent to monitor these indicators closely, as sustained quick ratios below 1.0 can constrain operational flexibility and affect the company’s ability to meet immediate obligations without relying on inventory sales or other less liquid assets.

The financial data reflects significant fluctuations in cash assets, current liabilities, and the cash ratio over the observed quarterly periods.

Total Cash Assets (US$ in millions):

The total cash assets exhibit a generally declining trend from March 31, 2020, until December 31, 2022, dropping from 18,322 million to a low of 9,027 million. There is a brief stabilization and slight recovery during 2023 reaching 9,269 million by December 31, 2022, before another decline early in 2023. Notably, a recovery phase begins in the fourth quarter of 2023, with cash assets rising from 7,685 million to 11,782 million by March 31, 2025, indicating some replenishment of liquidity.

Current Liabilities (US$ in millions):

Current liabilities show an overall upward trajectory, increasing from 19,232 million at the start of 2020 to 24,070 million by the first quarter of 2025. Peaks and troughs occur within this upward trend, with liabilities spiking at multiple points (e.g., 23,868 million in December 2021). The persistent increase in current liabilities suggests higher short-term obligations over time.

Cash Ratio (ratio):

The cash ratio, a liquidity metric comparing cash assets to current liabilities, decreases markedly from 0.95 in March 2020 to a low of 0.29 in September 2024, representing a significant erosion of direct cash coverage against short-term liabilities. There are intermittent minor recoveries (e.g., 0.49 at December 2020 and March 2025), but the overall trend points to a weakening liquidity position relative to current liabilities.

In summary, the data indicates that cash assets have diminished significantly in the initial years, with a partial recovery starting late 2023. Conversely, current liabilities have steadily increased, leading to a decline in the cash ratio, which reflects a weakening short-term liquidity position. The recent modest improvement in cash assets and cash ratio at the end of the observed period may suggest efforts to strengthen liquidity; however, the cash coverage of current liabilities remains modest relative to earlier periods.