Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
CVS Health Corp., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Current Ratio
- The current ratio exhibits a gradual decline over the analyzed period, starting at 0.99 in March 2020 and trending downward to approximately 0.82 by March 2025. There are minor fluctuations within this timeframe, with occasional slight recoveries, for instance around September 2020 and September 2022. However, the overall trajectory suggests a weakening in the company's short-term liquidity position, indicating that current liabilities are increasingly approaching or potentially exceeding current assets.
- Quick Ratio
- The quick ratio demonstrates a relatively stable but slightly decreasing trend, moving from 0.6 in March 2020 to around 0.59 in March 2025. The ratio oscillates with some variance, peaking around 0.64 in September 2022 and experiencing lows near 0.53 in December 2020. This pattern indicates that the company’s liquid assets excluding inventories are consistently maintained but do not show significant improvement over time, reflecting a cautious liquidity stance.
- Cash Ratio
- The cash ratio presents considerable volatility throughout the quarters, beginning at 0.21 in March 2020 and showing several rises and falls, such as a peak at 0.28 in September 2022 and troughs below 0.15 in early 2021 and again in late 2023 to early 2024. The ratio ends at a lower level of approximately 0.14 in March 2025, indicating a reduction in the company's most liquid asset availability relative to current liabilities. This variability suggests fluctuations in cash management or operational cash flows, which may impact immediate liquidity capability.
Current Ratio
CVS Health Corp., current ratio calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
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| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||
| Current ratio1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||||||||||||||||
| Abbott Laboratories | ||||||||||||||||||||||||||||
| Elevance Health Inc. | ||||||||||||||||||||||||||||
| Intuitive Surgical Inc. | ||||||||||||||||||||||||||||
| Medtronic PLC | ||||||||||||||||||||||||||||
| UnitedHealth Group Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current assets
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Current assets exhibited moderate fluctuations over the period under review. Starting from approximately 58.96 billion USD in March 2020, the value increased and decreased over subsequent quarters, peaking at 70.14 billion USD in September 2023. The trend shows a gradual increase overall, with notable growth especially from mid-2022 onwards, reaching 73.19 billion USD by March 2025.
- Current liabilities
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Current liabilities also showed variability but followed a generally rising trend throughout the periods. Beginning at approximately 59.56 billion USD in March 2020, current liabilities fluctuated but showed consistent growth from early 2022. The value reached its highest levels in the last observed quarters, culminating at about 88.96 billion USD in March 2025.
- Current ratio
-
The current ratio, a measure of short-term liquidity, remained below 1.0 for the entire duration, indicating current liabilities consistently exceeded current assets. The ratio started close to 0.99 in March 2020 but generally declined over time, with some minor improvements. The lowest point was approximately 0.80 in September 2024, before recovering slightly to around 0.82 by March 2025. This suggests increasing pressure on liquidity despite periodic minor improvements.
- Overall Analysis
-
The financial data reveal that although current assets increased moderately over the five-year period, current liabilities grew more substantially, causing a downward trend in the current ratio. The consistent current ratio below 1.0 raises concerns about the company's ability to cover short-term obligations from current assets alone. The widening gap between liabilities and assets highlights an increasing short-term liquidity risk that might require management attention to ensure adequate working capital levels.
Quick Ratio
CVS Health Corp., quick ratio calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||||
| Accounts receivable, net | ||||||||||||||||||||||||||||
| Total quick assets | ||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||
| Quick ratio1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||||||||||||||||
| Abbott Laboratories | ||||||||||||||||||||||||||||
| Elevance Health Inc. | ||||||||||||||||||||||||||||
| Intuitive Surgical Inc. | ||||||||||||||||||||||||||||
| Medtronic PLC | ||||||||||||||||||||||||||||
| UnitedHealth Group Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibit some volatility but generally display an upward trend over the period. Starting at 35,750 million USD as of March 31, 2020, the value fluctuated during 2020 and early 2021, reaching a low point of 32,596 million USD in December 2020. From 2021 onward, total quick assets increased more consistently, peaking at 49,115 million USD in September 2023 before a slight decline. By March 31, 2025, total quick assets stood at 52,279 million USD, marking a net increase over the five-year period. This upward movement suggests improved liquidity capacity, possibly reflecting stronger current asset management or increased liquid asset holdings.
- Current Liabilities
- Current liabilities show a generally increasing trend across the timeline. Beginning at 59,560 million USD on March 31, 2020, current liabilities rose steadily with some minor fluctuations, reaching peaks such as 84,627 million USD in September 2024. The growth in current liabilities continued into early 2025, ending at 88,961 million USD on March 31, 2025. The consistent rise in current liabilities indicates a growing short-term obligation burden, which may impact the company's liquidity risk profile if not matched by proportional asset growth.
- Quick Ratio
- The quick ratio, which measures the company's ability to meet current liabilities with quick assets, fluctuated within a relatively narrow range between 0.53 and 0.64 throughout the periods reviewed. It started at 0.60 in March 2020, dipped to a low of 0.53 in December 2020, showed partial recovery in 2021, and again oscillated around the 0.59 to 0.6 mark in subsequent years. The ratio generally remained below 1.0, suggesting that quick assets were consistently less than current liabilities, which signals potential pressure on immediate liquidity. The pattern indicates no significant improvement in liquidity relative to short-term obligations, despite the increase in absolute quick assets.
- Overall Analysis
- Despite the increase in total quick assets, the rise in current liabilities has outpaced the growth in quick assets, as reflected in the persistently below-1 quick ratio. This implies that the company's liquid assets may not be sufficient to cover short-term liabilities fully at any point, potentially indicating liquidity constraints. The fluctuating quick ratio highlights periods of tighter liquidity, particularly during late 2020, which may have been influenced by external or operational factors. Maintaining or improving liquidity ratios would be critical for mitigating short-term financial risk going forward.
Cash Ratio
CVS Health Corp., cash ratio calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||||
| Total cash assets | ||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||
| Cash ratio1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||||||||||||||||
| Abbott Laboratories | ||||||||||||||||||||||||||||
| Elevance Health Inc. | ||||||||||||||||||||||||||||
| Intuitive Surgical Inc. | ||||||||||||||||||||||||||||
| Medtronic PLC | ||||||||||||||||||||||||||||
| UnitedHealth Group Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Trend in Total Cash Assets
- Over the observed periods, total cash assets display fluctuating behavior with intermittent peaks and troughs. Initial values start moderately around 12,713 million US dollars, rising sharply to a high of 17,465 million by June 2020, then declining to a low of 8,788 million by March 2021. Subsequently, there is a recovery phase with peaks near 19,989 million in September 2022, followed by a general downward adjustment, and intermittent rises. The latest values show a decline back towards 12,654 million by March 2025. This pattern suggests variability in liquidity possibly influenced by operational or investing activities.
- Trend in Current Liabilities
- Current liabilities are consistently high relative to cash assets, exhibiting a general upward trend over the period. Beginning near 59,560 million US dollars in March 2020, liabilities increase steadily with minor fluctuations, reaching 88,961 million by March 2025. Periodic spikes, such as around late 2021 and early 2025, indicate growing short-term obligations which could affect liquidity and operating flexibility.
- Cash Ratio Analysis
- The cash ratio, representing cash assets divided by current liabilities, consistently remains below 0.3 throughout the periods. Starting at 0.21 in March 2020, it experiences minor fluctuations, peaking at 0.28 in September 2022 and declining afterwards. The ratio dips to as low as 0.11 in December 2024, signalling reduced immediate liquidity relative to short-term liabilities. This trend points to a generally tight liquidity position, which could imply reliance on other liquid assets or cash flow for meeting short-term obligations.
- Overall Financial Liquidity Insights
- The data reflects a company managing considerable current liabilities without a proportional increase in cash assets, as indicated by a persistently low cash ratio. Despite temporary improvements, liquidity remains constrained, with the cash ratio staying well below the benchmark of 1, which is often considered a safe liquidity threshold. Continued monitoring of cash flow management and short-term obligation coverage is advisable to maintain financial stability.