Gilead Sciences Inc. (NASDAQ:GILD)

Current Ratio

The current ratio exhibits a notable decline from a high of 3.25 in September 2020 to a low near 1.02 in June 2023, reflecting a significant reduction in current assets relative to current liabilities over this period. After this trough, the ratio gradually improves, reaching 1.37 by March 2025, suggesting a moderate strengthening in short-term liquidity. The initial sharp fall and subsequent stabilization indicate a shift in working capital management or liquidity conditions.

Quick Ratio

The quick ratio follows a broadly similar trajectory to the current ratio but remains consistently lower, as expected due to the exclusion of inventory. Starting from 2.93 in September 2020, it declines substantially to a low of 0.69 in September 2024. Thereafter, it rebounds to 1.0 by March 2025. This pattern mirrors a tightening in immediately liquid assets relative to current liabilities, with some recovery in the most recent periods.

Cash Ratio

The cash ratio demonstrates the most pronounced volatility and lowest overall levels among the three liquidity measures. It decreases sharply from 2.52 in September 2020 to a low of 0.26 in September 2024. Although there is a partial recovery to 0.64 by March 2025, the ratio remains substantially below historical highs. This decline indicates a marked reduction in cash and cash equivalents relative to current liabilities, signaling potentially more conservative cash holdings or a shift toward other liquid assets.

Overall, the liquidity ratios reveal a clear downward trend in short-term liquidity from 2020 through 2023, with the lowest points occurring generally around mid to late 2024. Modest recoveries in all three ratios into early 2025 suggest improved liquidity management or changes in the firm’s operating cycle. The persistence of ratios around or slightly above 1.0 for current and quick ratios by the latest period generally points to an adequate, though not robust, liquidity position in the short term.

Current Assets Trend

Current assets exhibited substantial volatility over the analyzed periods. Initially at 26,950 million USD in March 2020, there was a notable decline to 15,996 million USD by December 2020. Following that, current assets remained relatively stable with minor fluctuations through 2021 and 2022, fluctuating predominantly between approximately 12,600 million and 16,000 million USD. A recovery trend was observed starting in late 2023, reaching a peak of 19,173 million USD by December 2024 before declining slightly to 16,901 million USD in March 2025.

Current Liabilities Trend

Current liabilities also showed variability but with less pronounced trends compared to current assets. Beginning at 8,879 million USD in March 2020, liabilities rose to a peak around 11,610 million USD by December 2021, followed by some declines and increases. Notably, liabilities increased significantly in the middle of 2023 reaching as high as 13,964 million USD in June 2023, before stabilizing in the range of 11,700 million to 12,344 million USD towards early 2025.

Current Ratio Analysis

The current ratio demonstrated marked fluctuations, correlating primarily with the movements in current assets and liabilities. The ratio started at a high of 3.04 in March 2020, sharply dropping to 1.4 by December 2020, indicating a decrease in short-term liquidity. Over 2021 and 2022, the ratio hovered near 1.3 to 1.4, reflecting a relatively tight liquidity position. A significant dip to 1.02 in June 2023 suggested a near parity between current assets and liabilities, potentially signaling tighter liquidity. Afterward, the ratio improved, peaking again at 1.6 by December 2024, before slightly declining to 1.37 in March 2025. Throughout the periods, the current ratio remained above 1, implying current assets consistently exceeded current liabilities, although the margin varied considerably.

Overall Insights

The data reveals periods of reduced liquidity and tightening short-term financial flexibility, particularly in late 2020 and mid-2023. The subsequent recovery in current assets and improvement in the current ratio towards late 2024 suggests responsive adjustments in asset management or liability structuring. Nevertheless, the persistent volatility signals ongoing challenges in maintaining stable working capital levels, meriting close monitoring to ensure sufficient liquidity to meet short-term obligations.

Total Quick Assets

The total quick assets exhibited considerable volatility over the observed periods. Initially, there was a notable decline from 24,692 million USD at the end of Q1 2020 to 12,300 million USD by Q4 2020. Following this decrease, the value fluctuated with a general downward tendency, reaching a low of 7,435 million USD in Q2 2024. However, subsequent quarters showed a recovery, with total quick assets rising to 14,411 million USD by Q4 2024 before slightly decreasing again to 12,314 million USD by Q1 2025. This pattern indicates periods of both liquidity contraction and expansion rather than a steady trend.

Current Liabilities

Current liabilities similarly displayed a fluctuating pattern. From Q1 2020 to Q4 2020, there was an upward movement from 8,879 million USD to 11,397 million USD. This was followed by alternating periods of increase and decrease, reaching a peak of 13,015 million USD in Q1 2024. By the end of the dataset in Q1 2025, current liabilities stood at 12,344 million USD, showing an overall increasing tendency compared to the start of the period.

Quick Ratio

The quick ratio demonstrated significant variability across the quarters, reflecting the relationship between the available liquid assets and current liabilities. The ratio started strong at 2.78 in Q1 2020, indicating high liquidity relative to obligations, but sharply dropped to 1.08 by Q4 2020. Throughout the subsequent years, the quick ratio mostly hovered slightly above or below 1.0, indicating a near balance of liquid assets to current liabilities. A declining trend is observed in 2023 and early 2024, with ratios falling below 1.0, reaching lows of 0.69 and 0.72, suggesting tighter liquidity conditions. Notably, there was a recovery approaching 1.2 in Q4 2024 before settling at 1.0 in Q1 2025.

Overall Analysis

The data shows that while total quick assets and current liabilities have both experienced fluctuations, current liabilities have exhibited a general upward progression. The quick ratio's fluctuations, especially periods below 1.0, imply episodes where liquid assets were insufficient to cover current obligations fully, potentially indicating short-term liquidity pressures. However, recoveries towards or above 1.0 suggest intermittent improvements in liquidity. The volatility in total quick assets paired with rising liabilities underscores the importance of closely monitoring liquidity management moving forward.

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

Total Cash Assets

There is a considerable variability in total cash assets. Starting from a high of 20,785 million US dollars at the end of March 2020, cash assets declined significantly by December 2020 to 7,408 million. Through 2021, the cash position remained relatively stable with moderate fluctuations around a 5,500 to 6,500 million range.

In 2022, the cash assets showed a small rebound, peaking slightly at 6,385 million in December, then dipping again to levels near 5,800 million through early 2023. Mid to late 2023 saw an upward trend, reaching 7,264 million by December 2023. A notable decrease was observed in the first half of 2024, bottoming out at 2,772 million in June 2024, followed by a significant recovery in the subsequent quarters, with cash assets climbing to 9,991 million by December 2024 before falling to 7,926 million in March 2025.

Current Liabilities

Current liabilities exhibited a generally increasing trend over the entire timeline. Starting at 8,879 million in March 2020, the liabilities rose to 11,397 million by December 2020, indicating a growing short-term obligation load during that year.

During 2021, current liabilities fluctuated around the 10,000 to 11,610 million range. In 2022, liabilities continued to increase, reaching 11,237 million at year-end. The level of current liabilities showed more pronounced volatility in 2023, peaking at 13,964 million in June 2023 before decreasing slightly towards early 2024. From March 2024 onwards, current liabilities generally increased again, reaching 12,344 million by March 2025.

Cash Ratio

The cash ratio, a liquidity metric measuring the ability to cover current liabilities with cash assets, mirrored the volatility observed in cash assets, with a downward trajectory overall. Starting at a strong liquidity position of 2.34 in March 2020, the ratio plummeted to as low as 0.56 by December 2020 and remained below 1.0 throughout the entire subsequent period.

Between 2021 and 2022, the cash ratio hovered between 0.54 and 0.62, indicating cash assets were roughly half the value of current liabilities. Through 2023, the cash ratio dipped to a low of 0.48 in June but saw some improvement by December at 0.64.

A pronounced decline was noted in the first half of 2024, reaching a low of 0.26 in June, signaling pressured liquidity. However, this was followed by a recovery to 0.83 by December 2024. The ratio decreased again to 0.64 in March 2025 but remained better than the mid-2024 trough.

Overall, the data reflects a pattern of fluctuating liquidity with a general decline from early 2020 highs, impacted by varying levels of current liabilities. The company experienced periods of constrained cash resources relative to short-term obligations, particularly noticeable in mid-2020 and mid-2024. Yet, intermittent recoveries in cash assets and liquidity ratios suggest ongoing efforts to stabilize financial flexibility.