Gilead Sciences Inc. (NASDAQ:GILD)

Current Ratio

The current ratio exhibits moderate fluctuations over the analyzed periods, beginning at 1.37 in early 2021 and showing a slight decline towards the end of 2021, dipping to 1.27. In 2022, there is a rise back to around 1.48 in the first quarter, followed by a decline stabilizing around the range of 1.28 to 1.43 during 2023. In 2024 and early 2025, the ratio generally trends upward, reaching a peak of 1.6 by the fourth quarter of 2024 before marginally decreasing again by mid-2025. This pattern suggests relatively consistent short-term liquidity, with periods of strengthening and weakening liquidity capacity, but overall maintaining a level above 1, which implies the company generally has sufficient current assets to cover current liabilities.

Quick Ratio

The quick ratio follows a somewhat similar pattern to the current ratio but with more pronounced variability and lower absolute values, indicating less immediate liquidity when inventories are excluded. Starting just below 1 in early 2021, it rises to 1.06 by mid-2021, dips below 1 by late 2021, and remains around the 0.95 to 1.06 range throughout 2022 and early 2023. Notably, there is a significant drop in early 2024 to 0.72 and 0.69, representing reduced liquid assets relative to current liabilities, followed by a recovery exceeding 1.0 in late 2024, peaking at 1.2 before falling again to 1.0 and 0.89 in early and mid-2025. This volatility indicates fluctuating confidence in the company's ability to meet short-term obligations without relying on inventory sales.

Cash Ratio

The cash ratio consistently displays the lowest values among the liquidity ratios, reflecting a more conservative measure of liquidity focused solely on cash and cash equivalents. Starting at 0.58 in early 2021, it experiences moderate ups and downs throughout the years. There is an observable downward trend into early 2024, reaching as low as 0.26, indicative of diminished cash reserves relative to current liabilities at that time. Subsequently, cash reserves appear to rebound sharply toward late 2024, achieving a peak of 0.83, before trending downward again toward mid-2025, ending near 0.47. These changes could indicate cash management strategies shifting over time, affecting immediate availability of cash to cover short-term liabilities.

Summary

Overall, the financial data reveals a company managing its liquidity positions with fluctuations reflective of changes in asset composition and liability management. While the current ratio consistently remains above 1, portraying a generally stable liquidity condition, the quick and cash ratios show more variability, suggesting periods of tighter liquidity and dependence on inventories or less liquid current assets. The decline in cash ratio during the early part of 2024 signals a temporary tightening in cash availability, which recovers later in the year, aligning with an overall improvement in liquidity metrics. These trends indicate a dynamic liquidity management approach responding to varying short-term financial conditions.

Current Assets

Current assets exhibit a fluctuating trend over the periods analyzed. Starting at $13,278 million in March 2021, there is a gradual increase peaking at $16,085 million in December 2023. However, subsequent quarters show variability, including a notable decline to $12,317 million in June 2024 before rising sharply to $19,173 million by December 2024. The data concludes with a decrease to $14,718 million in June 2025. This pattern suggests periods of asset accumulation alternating with asset reduction, possibly reflecting operational or strategic adjustments in liquidity management.

Current Liabilities

Current liabilities generally show an upward trajectory with some volatility. The amount increases from $9,705 million in March 2021 to a high of $13,964 million in June 2023. Following this peak, liabilities decline somewhat to $11,280 million in December 2023 but then again fluctuate around the $11,000 to $12,000 million range through mid-2025. These changes indicate variable short-term obligations, potentially linked to financing or operational cycles impacting payable accounts or short-term borrowing.

Current Ratio

The current ratio demonstrates several shifts over the time frame. Initially, the ratio remains relatively stable around 1.36–1.37 until the end of 2021, when it dips to 1.27. It then increases to a peak of 1.48 in March 2022 before gradually declining toward a low of 1.02 in June 2023, indicative of tighter liquidity. A recovery phase follows, with the ratio climbing back to 1.60 by December 2024, suggesting improved short-term financial stability. In the final quarters, the ratio slightly diminishes but remains above 1.3, reflecting an overall adequate cushion of current assets over current liabilities.

Overall Analysis

The financial data reflects dynamic liquidity management across the periods. Fluctuations in current assets and liabilities show a company actively balancing short-term resources and obligations. The varying current ratio underscores phases of both constrained and improved liquidity positions. Periods of elevated current ratio suggest strategic accumulation of current assets or reduction in liabilities, while declines may signal increased operational pressures or increased short-term obligations. The overall pattern highlights prudent but flexible management of working capital to maintain sufficient liquidity buffers.

The financial data reveals fluctuations in liquidity metrics over the observed periods, indicating variable short-term financial health.

Total Quick Assets

Total quick assets exhibit a generally oscillating pattern. Starting near $9.6 billion in early 2021, values increased moderately through the end of 2021, peaking around $11.2 billion in December 2021. This was followed by a decline during the first half of 2022, with subsequent recovery through early 2023, culminating in a high near $11.9 billion at the end of 2023. The year 2024 shows added volatility; assets dropped to approximately $7.4 billion mid-year but rebounded sharply to $14.4 billion by the end of 2024, before falling to about $10 billion by mid-2025.

Current Liabilities

Current liabilities demonstrate an upward trajectory with some fluctuations. Beginning around $9.7 billion in March 2021, liabilities increased to about $11.6 billion by December 2021. This was followed by a brief decline in early 2022, then a steady rise through 2023, peaking near $13 billion in March 2024. Mid-2024 to mid-2025 saw relatively stable but elevated liabilities in the range of $11.2 billion to $12.3 billion, indicating increased short-term obligations compared to early 2021.

Quick Ratio

The quick ratio reflects the interplay between quick assets and current liabilities, offering insight into liquidity. Initially close to parity at 0.99 to 1.05 in 2021, the ratio fluctuated around 1 early in 2022, then dipped below 1 in late 2022 and early 2023, reaching lows of 0.78 in mid-2023 and further declines to 0.69 by mid-2024. This suggests a tightening liquidity position during these periods. However, a notable improvement occurred in late 2024, with the ratio rising to 1.20, indicating a momentary strengthening in the ability to cover short-term liabilities with quick assets. Subsequently, the ratio returned to slightly below 1 by mid-2025.

Overall, the company's liquidity position has experienced considerable variability, with periods of both strengthening and weakening short-term financial resilience. The sharp swings in quick assets and current liabilities, combined with the fluctuating quick ratio, underscore the importance of close monitoring and management of working capital components.

Total Cash Assets

The total cash assets exhibit a fluctuating pattern over the observed quarters. Initially, cash assets increased from $5,666 million to $6,525 million between March and June 2021, followed by a decline in September 2021 to $5,738 million. A resurgence occurred at year-end 2021 with cash rising to $6,520 million. Throughout 2022, cash assets remained relatively stable, maintaining levels between approximately $5,325 million and $6,385 million. During 2023, cash assets generally trended upward, peaking at $7,264 million in December. However, in the first half of 2024, a sharp decline is noted with cash assets dropping to a low of $2,772 million by June 2024. Subsequent quarters show a recovery trend, with cash assets reaching nearly $10 billion by December 2024 before decreasing again to just above $5 billion by June 2025.

Current Liabilities

Current liabilities demonstrate an overall upward trajectory across the period, starting at $9,705 million in March 2021 and rising steadily to over $11 billion by the end of 2021. In 2022, liabilities fluctuate, peaking near $11,237 million in December. Notable volatility occurs in 2023, with current liabilities reaching a high of $13,964 million in June but declining towards the end of the year to approximately $11,280 million. The upward trend resumes in 2024, with current liabilities exceeding $13,000 million in the first quarter, followed by moderate fluctuations causing values to settle just above $11 billion through mid-2025.

Cash Ratio

The cash ratio oscillates throughout the period, reflecting changes in cash assets relative to current liabilities. Starting at 0.58 in March 2021, the ratio peaks at 0.64 twice during the timeline—June 2021 and December 2023—indicating relatively strong liquidity at these points. Despite some quarters with ratios above 0.6, there are several periods of decline, reaching lows of 0.26 in June 2024 and 0.36 in March 2024, signaling reduced liquidity. The ratio recovers sharply to 0.83 in December 2024, the highest in the dataset, before declining again to 0.47 by June 2025. These fluctuations suggest variability in the company's short-term liquidity management and cash availability relative to liabilities.

Summary Insights

The data reveals a cyclical pattern in cash assets that does not consistently mirror movements in current liabilities, resulting in notable variability in the cash ratio. Periods of strengthened liquidity coincide with increases in cash resources or moderated liabilities, whereas declines in liquidity result from either sharp reductions in cash or rises in liabilities. The most significant liquidity challenges appear in early to mid-2024, followed by recovery toward the end of that year. Overall, the financial position reflects active cash management amid fluctuating obligations, with liquidity ratios demonstrating sensitivity to these dynamics over the reviewed timeframe.