Liquidity ratios measure the company ability to meet its short-term obligations.
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Analysis of Debt
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Liquidity Ratios (Summary)
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Current ratio | ||||||
Quick ratio | ||||||
Cash ratio |
Based on: 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), 10-K (reporting date: 2017-12-31).
- Current Ratio
- The current ratio exhibited a notable upward trend from 1.8 in 2017 to 3.46 in 2020, indicating a significant improvement in the company's short-term liquidity over this period. However, in 2021, the ratio experienced a slight decrease to 3.08, though it remained substantially higher than the initial value in 2017.
- Quick Ratio
- Similarly, the quick ratio steadily increased from 1.28 in 2017 to 2.34 in 2019, reaching its peak at 2.24 in 2020 before a modest decline to 2.07 in 2021. This pattern suggests an enhanced ability to cover immediate liabilities with more liquid assets, despite the slight reduction in the last recorded year.
- Cash Ratio
- The cash ratio also showed consistent growth from 0.95 in 2017 to 1.68 in 2019. Following this peak, the ratio decreased gradually, recording 1.57 in 2020 and 1.42 in 2021. Although there was a downward shift after 2019, the ratio remained elevated above the 2017 level, reflecting a relatively strong cash position throughout the timeframe.
- Overall Liquidity Analysis
- All three liquidity ratios demonstrated an overall improving trend from 2017 through 2020, indicating enhanced financial flexibility and an improved capacity to meet short-term obligations. The declines observed in 2021 across all ratios, while modest, suggest a slight reduction in liquidity strength but still reflect a robust liquidity position compared to the starting point in 2017.
Current Ratio
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||
Current assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Current ratio1 | ||||||
Benchmarks | ||||||
Current Ratio, Competitors2 | ||||||
Abbott Laboratories | ||||||
CVS Health Corp. | ||||||
Elevance Health Inc. | ||||||
Intuitive Surgical Inc. | ||||||
Medtronic PLC | ||||||
UnitedHealth Group Inc. | ||||||
Current Ratio, Sector | ||||||
Health Care Equipment & Services | ||||||
Current Ratio, Industry | ||||||
Health Care |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibit an overall increasing trend from 2017 to 2021. Starting at approximately 2.53 billion US dollars in 2017, there was a slight decline in 2018 to about 2.29 billion, followed by a significant rise through 2019 to 2021, reaching over 3.18 billion US dollars by the end of 2021. This indicates an improvement in the company’s short-term asset base over the period.
- Current Liabilities
- Current liabilities show a decreasing trend from 2017 through 2020, dropping from roughly 1.40 billion US dollars in 2017 to below 894 million in 2020. However, there is an increase observed in 2021, with current liabilities rising to approximately 1.03 billion US dollars. The initial decline suggests effective management of short-term obligations, though the increase in 2021 indicates a recent rise in liabilities.
- Current Ratio
- The current ratio improves substantially from 1.8 in 2017 to a peak of 3.46 in 2020, indicating increasing liquidity and a stronger ability to meet short-term liabilities with current assets. In 2021, the ratio declines slightly to 3.08 but remains significantly higher than the starting point. This suggests that although there was a slight decrease in liquidity relative to the previous year, the company maintains a robust short-term financial position.
Quick Ratio
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||
Cash and cash equivalents | ||||||
Short-term investments | ||||||
Accounts receivable, net of allowances | ||||||
Other receivables | ||||||
Total quick assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Quick ratio1 | ||||||
Benchmarks | ||||||
Quick Ratio, Competitors2 | ||||||
Abbott Laboratories | ||||||
CVS Health Corp. | ||||||
Elevance Health Inc. | ||||||
Intuitive Surgical Inc. | ||||||
Medtronic PLC | ||||||
UnitedHealth Group Inc. | ||||||
Quick Ratio, Sector | ||||||
Health Care Equipment & Services | ||||||
Quick Ratio, Industry | ||||||
Health Care |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets demonstrated an overall increasing trend from 2017 to 2021. Starting at 1,799,700 thousand US dollars in 2017, the value declined in 2018 to 1,493,800 thousand but then rose significantly in 2019 to 2,116,000 thousand. The figure slightly decreased in 2020 to 2,005,400 thousand before increasing again to 2,131,700 thousand in 2021. This indicates an overall growth in liquid assets available for immediate use over the five-year period, with a notable dip in 2018 and 2020.
- Current Liabilities
- Current liabilities decreased substantially from 1,402,900 thousand US dollars in 2017 to 876,600 thousand in 2018. After this sharp drop, they remained relatively stable around the 900,000 thousand range in 2019 and 2020, before rising again to 1,032,300 thousand in 2021. This pattern suggests improved short-term debt management after 2017, followed by a slight increase in liabilities in the most recent period reviewed.
- Quick Ratio
- The quick ratio, measuring the ability to cover current liabilities with quick assets, shows a clear upward trend from 1.28 in 2017 to a peak of 2.34 in 2019. It then slightly declined reaching 2.24 in 2020 and further to 2.07 in 2021. Despite the recent decrease, the ratio remains above 2.0 in the last two years, indicating a strong liquidity position overall, with capacity to meet short-term obligations without relying on inventory sales.
Cash Ratio
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||
Cash and cash equivalents | ||||||
Short-term investments | ||||||
Total cash assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Cash ratio1 | ||||||
Benchmarks | ||||||
Cash Ratio, Competitors2 | ||||||
Abbott Laboratories | ||||||
CVS Health Corp. | ||||||
Elevance Health Inc. | ||||||
Intuitive Surgical Inc. | ||||||
Medtronic PLC | ||||||
UnitedHealth Group Inc. | ||||||
Cash Ratio, Sector | ||||||
Health Care Equipment & Services | ||||||
Cash Ratio, Industry | ||||||
Health Care |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets exhibited fluctuations over the five-year period. Initially, there was a decline from approximately $1.34 billion at the end of 2017 to $956.5 million by the end of 2018. Following this decrease, a significant increase occurred in 2019, with cash assets rising to about $1.52 billion. This upward trend slightly tapered off but remained relatively stable through 2020 and 2021, with values of approximately $1.40 billion and $1.47 billion, respectively.
- Current liabilities
- Current liabilities showed a marked reduction in 2018 compared to 2017, decreasing from roughly $1.40 billion to $876.6 million. From 2018 onwards, liabilities remained somewhat stable in 2019 and 2020, with minor variations around $900 million. However, a noticeable increase occurred in 2021, bringing current liabilities up to approximately $1.03 billion.
- Cash ratio
- The cash ratio demonstrated an overall increasing trend from 2017 to 2019, rising from 0.95 to a peak of 1.68. This indicates an improvement in the company's liquidity position during that period, as cash and cash equivalents relative to current liabilities strengthened. After 2019, the ratio declined but stayed above 1.0 in the subsequent years, registering 1.57 in 2020 and 1.42 in 2021, hence maintaining a comfortable liquidity buffer despite the slight downturn.
- Summary of trends and insights
- The data reflects an initial dip in liquidity and cash reserves between 2017 and 2018, followed by a recovery and strengthening through 2019. The cash ratio improvement in this period suggests that the company enhanced its short-term financial stability. Stability in cash assets in the latter years indicates prudent cash management, although current liabilities rose in 2021, leading to a moderate reduction in the cash ratio. Nonetheless, the company preserved adequate liquidity above the critical threshold of 1, which implies it maintained the ability to cover its short-term obligations using its most liquid assets throughout the observed timeframe.