IQVIA Holdings Inc. (NYSE:IQV)

Current Ratio

The current ratio exhibited a slight fluctuation over the analyzed period. It began at 1.1 in 2018 and showed a marginal decline to 1.05 in 2019. Following this, there was a modest recovery to 1.12 in 2020. However, the ratio then declined noticeably in the subsequent years, dropping to 0.91 in 2021 and further to 0.89 in 2022. This downward trend in the latter years indicates a decreasing ability to cover short-term liabilities with current assets.

Quick Ratio

The quick ratio mirrored a similar pattern to the current ratio but with lower absolute values throughout the period. Starting at 0.94 in 2018, it declined to 0.88 in 2019 before recovering slightly to 0.95 in 2020. Subsequently, the quick ratio decreased significantly to 0.77 in 2021 and 0.76 in 2022. This trend suggests a reduction in the company’s readily available liquid assets relative to current liabilities over time.

Cash Ratio

The cash ratio showed more volatility during the period. It started at 0.27 in 2018 and decreased to 0.23 in 2019. The ratio then experienced a notable increase to 0.42 in 2020, indicating improved immediate liquidity during that year. However, this was followed by declines to 0.28 in 2021 and 0.23 in 2022, returnings to levels similar to those seen in 2019. The fluctuation reflects changes in the company’s most liquid assets relative to its short-term liabilities, with a peak in 2020.

The financial data from 2018 to 2022 reveals several noteworthy trends regarding liquidity and short-term financial health.

Current Assets

Current assets have demonstrated an overall increasing trend over the five-year period. Starting at $3,874 million at the end of 2018, the assets grew consistently to reach a peak of $5,090 million in 2020. Although there was a slight decline in 2021 to $4,763 million, current assets again increased to $4,981 million by the close of 2022. This pattern indicates ongoing asset growth with some minor fluctuations.

Current Liabilities

Current liabilities have steadily increased each year, rising from $3,534 million in 2018 to $5,578 million in 2022. The consistent upward trajectory suggests that the company's short-term obligations have been growing annually without any reversal or decline, indicating increased short-term debt or operational liabilities.

Current Ratio

The current ratio, which measures the company's ability to cover short-term liabilities with short-term assets, shows a declining trend over the period. It started at 1.10 in 2018, indicating slightly more current assets than liabilities, but gradually decreased to below 1.0 by 2021 (0.91) and further to 0.89 in 2022. A current ratio less than 1 suggests that current liabilities exceed current assets, reflecting potential liquidity concerns or tighter working capital management.

In summary, while current assets have generally increased, current liabilities have grown at a faster rate, leading to a declining current ratio below the critical threshold of 1 in the last two years. This trend may imply increasing pressure on short-term liquidity, warranting further attention to cash flow and debt management strategies.

Total Quick Assets

The total quick assets showed a general increase over the five-year period. Starting at 3,332 million USD in 2018, the value rose to 4,312 million USD by 2020, indicating substantial growth in liquid assets. However, there was a decrease to 4,028 million USD in 2021, followed by a modest recovery to 4,226 million USD in 2022.

Current Liabilities

Current liabilities exhibited a continuous upward trend throughout the entire timeframe. The amount increased steadily from 3,534 million USD in 2018 to 5,578 million USD in 2022, reflecting growing short-term obligations faced by the company each year.

Quick Ratio

The quick ratio, a measure of short-term liquidity, declined over the period reviewed. It began just below parity at 0.94 in 2018, decreased slightly to 0.88 in 2019, and returned near the initial level at 0.95 in 2020. Subsequently, it experienced a more pronounced decline to 0.77 in 2021, and a further slight dip to 0.76 in 2022. This downward trend indicates a diminishing ability to cover current liabilities with quick assets over the recent years.

Summary of Trends

While total quick assets increased overall, the steady rise in current liabilities outpaced this growth. The concurrent decrease in the quick ratio underscores a deteriorating liquidity position, suggesting that the company’s immediate financial flexibility to settle obligations has weakened over the five-year span.

The financial data reveals several noteworthy trends over the five-year period ending December 31, 2022.

Total Cash Assets

There was a slight decline in total cash assets from 938 million US dollars in 2018 to 899 million in 2019. This was followed by a significant increase in 2020, reaching 1,902 million US dollars, more than doubling the previous year. However, the subsequent years showed a decrease to 1,477 million in 2021 and further down to 1,309 million in 2022. Overall, cash assets peaked in 2020 but have been trending downward since then.

Current Liabilities

Current liabilities displayed a consistent upward trajectory throughout the period. Starting at 3,534 million US dollars in 2018, liabilities increased each year, reaching 3,945 million in 2019, 4,558 million in 2020, 5,241 million in 2021, and ultimately 5,578 million in 2022. This steady rise suggests growing short-term obligations over the five-year span.

Cash Ratio

The cash ratio, which measures the liquidity position by comparing cash assets to current liabilities, exhibited some volatility. It declined slightly from 0.27 in 2018 to 0.23 in 2019, then spiked to 0.42 in 2020, reflecting the surge in cash assets relative to liabilities that year. Following this peak, the ratio fell to 0.28 in 2021 and dropped back to 0.23 in 2022, aligning with the decrease in cash assets and continued growth in current liabilities.

In summary, while the company experienced a notable cash asset increase in 2020, this was not sustained in the following years. Concurrently, current liabilities have steadily increased, exerting pressure on liquidity as indicated by the declining cash ratio after 2020. The most recent figures show a lower liquidity buffer relative to obligations, which could be an area of concern for short-term financial stability.