Liquidity ratios measure the company ability to meet its short-term obligations.
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- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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Liquidity Ratios (Summary)
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Current ratio | ||||||
Quick ratio | ||||||
Cash ratio |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the provided financial ratios over the five-year period reveals several noteworthy trends related to liquidity management.
- Current Ratio
- The current ratio exhibited a gradual decline from 1.55 in 2020 to 1.4 in 2022, indicating a slight reduction in the company's ability to cover short-term liabilities with current assets during this period. Thereafter, a moderate recovery was observed, with ratios increasing to 1.44 in 2023 and 1.45 in 2024. Despite the slight rebound, the ratio remained below the initial 2020 value, suggesting cautious management of working capital.
- Quick Ratio
- The quick ratio followed a downward trajectory from 1.42 in 2020 to 1.27 in 2022, reflecting a decline in the company's liquidity when excluding inventories. This was followed by a modest improvement in 2023 and 2024, reaching 1.3 and 1.32 respectively. This pattern parallels the current ratio trend, indicating persistent but slightly alleviated pressure on liquid asset availability.
- Cash Ratio
- The cash ratio showed a consistent decrease across the entire period, from 1.04 in 2020 to 0.85 in 2024. This steady decline suggests diminishing cash and cash-equivalent reserves relative to current liabilities. Unlike the other liquidity measures, no recovery was observed in the last two years, signaling a potential tightening of immediate cash resources.
In summary, the company experienced a general decline in liquidity ratios over the initial three years, signaling reduced short-term financial flexibility. Although the current and quick ratios demonstrated some recovery in the latter years, the cash ratio's continued decline may point to a more conservative cash position or utilization of cash reserves. These patterns highlight evolving liquidity management strategies and potential changes in working capital structure.
Current Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Current assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Current ratio1 | ||||||
Benchmarks | ||||||
Current Ratio, Competitors2 | ||||||
Abbott Laboratories | ||||||
CVS Health Corp. | ||||||
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: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The analysis of the annual financial data reveals several notable trends regarding liquidity and short-term financial stability over the five-year period.
- Current Assets
- Current assets demonstrated a steady growth from US$45,751 million at the end of 2020 to US$60,029 million by the end of 2023. However, there is a slight decline in 2024, with current assets falling to US$58,942 million. Overall, this indicates an upward trend in liquid and short-term assets held over the period, contributing positively to the company's liquidity base.
- Current Liabilities
- Current liabilities also increased consistently from US$29,453 million in 2020 to US$41,791 million in 2023, followed by a small reduction to US$40,581 million in 2024. The increase in short-term obligations parallels the growth observed in current assets, suggesting an expansion in the company’s operational scale or increased short-term financing requirements.
- Current Ratio
- The current ratio exhibits a gradual decline from 1.55 in 2020 to 1.40 in 2022, indicating a reduction in short-term liquidity relative to current liabilities during this period. However, the ratio recovers slightly in 2023 and 2024, rising to 1.44 and 1.45 respectively. Despite the initial decline, the ratio remains above 1.4 throughout, suggesting that the company maintains a comfortable margin to cover its short-term liabilities with current assets.
In summary, both current assets and current liabilities increased substantially over the five years, reflecting growth in the scale of operations. The current ratio shows a slight downward trend initially but stabilizes above 1.4 later, indicating efficient management of short-term liquidity risks despite growing obligations. The minor decrease in current assets and liabilities in 2024 warrants attention but does not significantly impact the overall liquidity position.
Quick Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Fixed maturity securities | ||||||
Equity securities | ||||||
Premium receivables | ||||||
Self-funded receivables | ||||||
Other receivables | ||||||
Total quick assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Quick ratio1 | ||||||
Benchmarks | ||||||
Quick Ratio, Competitors2 | ||||||
Abbott Laboratories | ||||||
CVS Health Corp. | ||||||
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: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets show a consistent upward trend from 41,691 million US dollars in 2020 to 54,234 million in 2023, indicating an increase in highly liquid assets available to meet short-term obligations. However, there is a slight decline in 2024 to 53,752 million, which may suggest a small reduction in liquid asset accumulation or a shift in asset composition.
- Current Liabilities
- Current liabilities have increased steadily from 29,453 million US dollars in 2020 to 41,791 million in 2023, reflecting growing short-term obligations. In 2024, current liabilities slightly decrease to 40,581 million, indicating a minor reduction in immediate financial obligations.
- Quick Ratio
- The quick ratio demonstrates a gradual decline from 1.42 in 2020 to 1.27 in 2022, suggesting a decreasing coverage of current liabilities by quick assets over this period. Subsequently, there is a moderate improvement in 2023 and 2024, reaching 1.3 and 1.32 respectively, which implies a recovery in the ability to cover short-term liabilities with liquid assets. Despite this improvement, the quick ratio in 2024 remains below the 2020 level, indicating a slightly lower liquidity buffer compared to the beginning of the analyzed period.
Cash Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Fixed maturity securities | ||||||
Equity securities | ||||||
Total cash assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Cash ratio1 | ||||||
Benchmarks | ||||||
Cash Ratio, Competitors2 | ||||||
Abbott Laboratories | ||||||
CVS Health Corp. | ||||||
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: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends over the five-year period under review. Total cash assets experienced a steady increase from 30,733 million US dollars at the end of 2020 to a peak of 36,369 million US dollars by the end of 2023, followed by a slight decline to 34,681 million US dollars in 2024. This indicates a general upward trajectory in available cash resources with a minor reduction in the most recent year.
Current liabilities showed a consistent upward trend throughout the period, rising from 29,453 million US dollars in 2020 to 40,581 million US dollars in 2024. This growth in liabilities has outpaced the growth in cash assets, signifying an increasing level of short-term financial obligations.
Correspondingly, the cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, declined over the years. The ratio dropped from 1.04 in 2020 to 0.85 in 2024, indicating a reduced margin of liquidity relative to current liabilities. The decline in this ratio suggests a tightening liquidity position, despite the firm maintaining substantial cash reserves.
- Total Cash Assets
- Steady increase until 2023, slight decrease in 2024.
- Current Liabilities
- Continuous growth from 2020 through 2024, surpassing growth in cash assets.
- Cash Ratio
- Gradual decline from above 1 in 2020 to 0.85 in 2024, indicating decreasing liquidity coverage.
In summary, the data reflects a company that has increased its cash holdings but has taken on proportionally more current liabilities, leading to reduced liquidity as measured by the cash ratio. This trend points to a growing reliance on short-term obligations and a potential need to monitor liquidity management closely going forward.