Medtronic PLC (NYSE:MDT)

Current Ratio

The current ratio exhibits notable fluctuations over the analyzed periods. Initially, it remained relatively high, ranging from 2.67 to 2.91 between July 2019 and October 2021, suggesting a strong short-term liquidity position. However, from January 2022 through July 2022, there was a significant decline, reaching a low of 1.58. Thereafter, the ratio demonstrated a recovery phase, increasing up to 2.42 by October 2023. The subsequent periods show a gradual decrease again, stabilizing around the 1.85 to 2.01 range by mid-2025. Overall, the current ratio maintains above 1.5 for most of the period, indicating sufficient current assets to cover current liabilities, though its volatility suggests varying liquidity stress points.

Quick Ratio

The quick ratio follows a trend broadly consistent with the current ratio but at lower absolute values, reflecting the exclusion of inventory from liquid assets. From July 2019 to October 2021, it stayed relatively stable between 1.95 and 2.07, indicating a comfortable buffer of liquid assets. A sharp decrease is observed starting January 2022, bottoming near 1.01 in July 2022, signaling reduced liquid liquidity relative to current liabilities. Post-July 2022, a moderate recovery is evident, with the ratio rising to approximately 1.54 by April 2023. Afterwards, it erodes slightly over the remaining periods, settling around 1.17 to 1.25 towards mid-2025. The quick ratio's pattern underscores an initial strong liquidity position weakening sharply in early 2022 before partial restoration and mild subsequent erosion.

Cash Ratio

The cash ratio, representing the most conservative liquidity measure, starts at a moderate level near 1.25 to 1.37 from July 2019 through October 2021. A notable decline ensues from January 2022, plunging to a low of 0.63 by July 2022. This period marks the most pronounced reduction across all liquidity metrics, implying reduced cash and cash equivalents relative to current liabilities. The ratio recovers only slightly thereafter, fluctuating between 0.66 and 0.88 for the remaining quarters up to mid-2025. The consistently lower cash ratio compared to current and quick ratios suggests a tighter cash position during the recent periods and limited immediate cash availability to cover obligations.

The analysis of current assets and current liabilities reveals a fluctuating liquidity profile over the periods observed. Current assets showed variability, with values generally oscillating around a range of approximately 21,000 to 26,000 million US dollars. Notably, peak values occurred around late 2020 and early 2023, indicative of periods with stronger short-term resource availability.

Current liabilities also experienced significant variation, generally trending upwards until mid-2022, with several peaks exceeding 14,000 million US dollars. Subsequently, there was a decline in liabilities towards mid-2023 before a slight increase in later quarters, suggesting some volatility in short-term obligations.

The current ratio, which measures liquidity by comparing current assets to current liabilities, illustrates these fluctuations more clearly. Initially, the ratio declined from above 2.6 in mid-2019 to a low near 1.58 in mid-2022, indicating tightening liquidity conditions during this period. Following this low, the ratio rebounded above 2.3 by mid-2023. However, this improvement was not sustained consistently, with the ratio decreasing again towards the end of the observed timeframe, stabilizing slightly above 1.8 by mid-2025.

Overall, the liquidity position showed periods of contraction and recovery, reflecting changing dynamics in the management of working capital. The initial decline in the current ratio suggests increasing pressure on liquidity up to 2022, likely due to rising liabilities outpacing asset growth. The subsequent partial recovery indicates efforts to strengthen liquidity, though the ratio remaining close to or below 2 signals a relatively moderate buffer for short-term obligations throughout most of the periods covered.

Current Assets

Fluctuated with peaks around late 2020 and early 2023, ranging roughly from 21,000 to 26,000 million USD.

Current Liabilities

Generally increased until mid-2022, surpassing 14,000 million USD at points, then declined and modestly rose again towards 2025.

Current Ratio

Decreased from above 2.6 in 2019 to a low near 1.58 in 2022, rose again to above 2.3 by mid-2023, then fell slightly, ending near 1.8 in 2025.

Liquidity Trends

Overall pattern indicates tightening liquidity up to mid-2022 followed by partial recovery and moderate stabilization, reflecting fluctuating short-term financial health.

The financial data reveals notable fluctuations and trends in liquidity over the examined periods. Quick assets demonstrate variability, with some distinct peaks and troughs throughout the timeline. Starting at a level of US$16,577 million in mid-2019, quick assets increased to a high of US$19,854 million by early 2021, followed by a general decline, reaching values in the range of approximately US$13,682 to US$14,289 million during 2023 and 2024, with a slight rebound to US$15,480 million by mid-2025.

Current liabilities display a somewhat volatile pattern. Initial figures around US$8,518 million in mid-2019 escalated sharply to a peak of roughly US$14,465 million by late 2022, then dipped significantly to approximately US$9,047 million in early 2023. Subsequently, liabilities rose again, fluctuating between approximately US$9,700 million and US$12,879 million through 2024 and mid-2025.

The quick ratio, an indicator of liquidity health, fluctuates in line with the changes seen in quick assets and current liabilities. It began at a strong position near 1.95 and peaked at 2.07 in late 2021, reflecting high liquidity. Following this, the quick ratio declined notably, dropping as low as around 1.01 in late 2022. After this low point, it showed some recovery and stabilization, oscillating between approximately 1.17 and 1.54 from 2023 through mid-2025.

Liquidity Trends

The general trend shows an early phase of growing liquidity, with both quick assets rising and the quick ratio improving until early 2021. This was followed by a period of decreased liquidity, indicated by reductions in quick assets and a falling quick ratio through 2022. The latter period from 2023 onward indicates attempts at stabilization, though the quick ratio remains below early peaks, suggesting moderate liquidity levels.

Volatility in Current Liabilities

Current liabilities experienced substantial fluctuations, with a significant increase during 2020 to 2022. The sharp rise may suggest increased short-term financial obligations or operational scaling during this period. The subsequent decline and fluctuations imply adjustments in liability management or operational conditions.

Overall Financial Implication

While liquidity was strong initially, the decreasing quick ratio and fluctuating quick assets in recent periods signal a need for attention to short-term financial stability. The company's ability to meet immediate obligations has been challenged, particularly noticeable in late 2022. However, the partial recovery thereafter suggests efforts to improve liquidity conditions.

The analysis of the quarterly financial data reveals several notable trends in liquidity and short-term financial positioning over the observed periods.

Total Cash Assets

The total cash assets exhibited a fluctuating trend throughout the quarters. Initially, cash assets grew from approximately 10,683 million USD in mid-2019 to a peak of about 14,639 million USD in early 2021. Following this peak, there was a noticeable decline with cash assets dropping to the range between 7,700 and 8,000 million USD in successive quarters post-2022, indicating a considerable reduction in liquid assets available over the more recent periods.

Current Liabilities

Current liabilities have shown variability as well, beginning at roughly 8,518 million USD in mid-2019 and increasing sharply to a peak of approximately 14,465 million USD by late 2022. After this peak, liabilities somewhat stabilized but remained elevated relative to earlier periods, fluctuating between 9,000 and 12,800 million USD towards the latest quarters. This pattern suggests increased short-term obligations over time, with a general upward trajectory until late 2022 and some moderation thereafter.

Cash Ratio

The cash ratio, which measures the company's ability to cover current liabilities with cash and cash equivalents, showed a declining trend over the analyzed timeframe. Starting above 1.2 in 2019, indicating strong liquidity, the ratio decreased below 1.0 in mid-2020, briefly recovering in early 2021. From 2022 onward, the ratio consistently remained below 1.0, fluctuating between 0.6 and 0.8, which signals a reduced coverage of short-term liabilities by cash assets. This decline may reflect more aggressive utilization of cash or an increase in liabilities outpacing cash growth.

Overall, the data indicates the company experienced a period of strong liquidity and cash accumulation up to early 2021, followed by a downward trend in liquidity ratios amid rising current liabilities in subsequent years. The sustained cash ratio below 1.0 over recent quarters suggests tighter short-term financial flexibility and potential reliance on other forms of financing or working capital management strategies.