Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Stryker Corp., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Current Ratio Analysis
- The current ratio exhibits an overall upward trend from the first quarter of 2018 through the end of 2020, increasing from 1.64 to a peak of 2.91 in the second quarter of 2020. This suggests improving short-term liquidity during this period. However, from the third quarter of 2020 onwards, the current ratio declines somewhat, stabilizing closer to the 2.0 level, with a value of 1.98 reported in the first quarter of 2022. The initial rise indicates strengthening ability to meet short-term liabilities, whereas the subsequent decline and stabilization suggest a normalization of liquidity after a period of expansion.
- Quick Ratio Analysis
- The quick ratio shows a similar upward trajectory from early 2018 through mid-2020, increasing from 0.95 to a high of 2.04 in the fourth quarter of 2020. This increase points to an enhanced capacity to cover immediate liabilities with the most liquid assets, excluding inventory. Following this peak, the ratio experiences a decrease and fluctuates between approximately 1.03 and 1.33 into early 2022. Despite this volatility, the quick ratio remains above 1.0 for much of the period, indicating relatively strong liquidity excluding inventory.
- Cash Ratio Analysis
- The cash ratio displays more variability than the previous ratios. Starting at 0.51 in early 2018, it decreases slightly before rising sharply, reaching notably high levels of 1.50 to 1.53 in the third and fourth quarters of 2020. This increase signifies a considerable accumulation of cash and cash equivalents relative to current liabilities during this time. Post-2020, a marked decline occurs, with the ratio falling to 0.35 by the first quarter of 2022, the lowest point observed. This suggests a reduction in cash reserves relative to current liabilities, potentially reflecting shifts in cash management or operational needs.
- Overall Liquidity Trends
- The analysis of the three liquidity ratios over the examined period reveals that liquidity improved significantly from 2018 through 2020, with notable peaks in all ratios around the middle to late 2020. This period corresponds with enhanced ability to cover current obligations by current assets, quick assets, and cash. After this peak, all ratios decrease, indicating a moderation or strategic shift in liquidity management. Nevertheless, the current and quick ratios maintain levels generally above 1.0, suggesting continued sound short-term financial health despite the observed declines. The cash ratio’s more pronounced drop may warrant closer monitoring to understand cash flow dynamics.
Current Ratio
Stryker Corp., current ratio calculation (quarterly data)
| Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Current assets | 8,725) | 10,017) | 9,460) | 9,032) | 8,979) | 9,707) | 13,545) | 12,801) | 10,736) | 11,360) | 8,566) | 8,185) | 7,888) | 9,733) | 7,918) | 7,413) | 7,851) | ||||||
| Current liabilities | 4,408) | 4,549) | 4,449) | 4,252) | 3,953) | 5,041) | 4,689) | 4,405) | 4,162) | 4,400) | 3,921) | 3,946) | 3,713) | 4,807) | 4,153) | 4,046) | 4,800) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Current ratio1 | 1.98 | 2.20 | 2.13 | 2.12 | 2.27 | 1.93 | 2.89 | 2.91 | 2.58 | 2.58 | 2.18 | 2.07 | 2.12 | 2.02 | 1.91 | 1.83 | 1.64 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||
| Abbott Laboratories | 1.85 | 1.85 | 1.83 | 1.79 | 1.75 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | 1.36 | 1.47 | 1.48 | 1.49 | 1.57 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | 5.22 | 5.08 | 5.58 | 5.99 | 6.71 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | 2.89 | 2.65 | 2.10 | 2.16 | 1.87 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | 0.78 | 0.79 | 0.77 | 0.77 | 0.74 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= 8,725 ÷ 4,408 = 1.98
2 Click competitor name to see calculations.
The analysis of the recent quarterly financial data reveals several noteworthy trends regarding liquidity and working capital management.
- Current Assets
- Over the observed period, current assets demonstrate a generally fluctuating yet upward trajectory until late 2020, peaking significantly at $13,545 million in September 2020. This peak is followed by a sharp decline to $9,707 million by December 2020. Since then, current assets exhibit minor fluctuations but maintain a lower level compared to earlier peaks, ending at $8,725 million in March 2022.
- Current Liabilities
- Current liabilities show a less volatile pattern compared to assets but still experience gradual increases over time. Initial values near $4,800 million decreased notably to approximately $3,700-$4,400 million between 2019 and early 2020, before rising steadily to reach about $5,041 million by December 2020. Subsequently, liabilities stabilize around the $4,400-$4,500 million range into early 2022.
- Current Ratio
- The current ratio exhibits a general strengthening trend from 1.64 in March 2018 to a peak of 2.91 in June 2020, indicating improved short-term liquidity and greater ability to cover current liabilities with available current assets. However, a marked decline follows in late 2020, with the ratio dropping to 1.93 in December 2020. Since then, the ratio oscillates between roughly 1.98 and 2.27, suggesting stabilization of liquidity at a moderately strong level.
Overall, the data suggests that the company enhanced its liquidity position steadily through 2020, reaching a high point mid-year. The subsequent reduction in both current assets and current ratio indicates a possible shift in asset management or operational changes influencing working capital. The stabilization of ratios post-2020 implies a balanced approach to maintaining short-term financial health in more recent quarters.
Quick Ratio
Stryker Corp., quick ratio calculation (quarterly data)
| Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Cash and cash equivalents | 1,458) | 2,944) | 2,563) | 2,241) | 2,238) | 2,943) | 7,083) | 6,539) | 3,964) | 4,337) | 1,948) | 1,754) | 1,674) | 3,616) | 1,918) | 1,641) | 2,179) | ||||||
| Marketable securities | 72) | 75) | 76) | 84) | 74) | 81) | 78) | 80) | 84) | 88) | 88) | 85) | 84) | 83) | 292) | 279) | 276) | ||||||
| Accounts receivable, less allowance | 2,991) | 3,022) | 2,817) | 2,714) | 2,616) | 2,701) | 2,426) | 2,203) | 2,646) | 2,893) | 2,438) | 2,408) | 2,284) | 2,332) | 2,076) | 2,089) | 2,108) | ||||||
| Total quick assets | 4,521) | 6,041) | 5,456) | 5,039) | 4,928) | 5,725) | 9,587) | 8,822) | 6,694) | 7,318) | 4,474) | 4,247) | 4,042) | 6,031) | 4,286) | 4,009) | 4,563) | ||||||
| Current liabilities | 4,408) | 4,549) | 4,449) | 4,252) | 3,953) | 5,041) | 4,689) | 4,405) | 4,162) | 4,400) | 3,921) | 3,946) | 3,713) | 4,807) | 4,153) | 4,046) | 4,800) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Quick ratio1 | 1.03 | 1.33 | 1.23 | 1.19 | 1.25 | 1.14 | 2.04 | 2.00 | 1.61 | 1.66 | 1.14 | 1.08 | 1.09 | 1.25 | 1.03 | 0.99 | 0.95 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||
| Abbott Laboratories | 1.21 | 1.28 | 1.25 | 1.19 | 1.16 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | 1.23 | 1.33 | 1.33 | 1.35 | 1.43 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | 4.40 | 4.34 | 4.66 | 5.12 | 5.76 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | 2.06 | 1.91 | 1.58 | 1.63 | 1.37 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | 0.72 | 0.72 | 0.71 | 0.71 | 0.68 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 4,521 ÷ 4,408 = 1.03
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals the following trends and insights regarding liquidity and short-term financial health:
- Total quick assets
- The total quick assets demonstrate pronounced fluctuations over the observed periods. Starting at 4,563 million USD in Q1 2018, the figure declines to a low point of 4,009 million USD in Q2 2018 before rising sharply to 6,031 million USD by Q4 2018. In 2019, quick assets generally increase until peaking at 7,318 million USD in Q4, followed by a strong upward trend reaching a peak of 9,587 million USD in Q3 2020, indicating a significant accumulation of liquid assets during this period. Subsequently, there is a notable decline in Q4 2020 to 5,725 million USD, with values fluctuating moderately in 2021 and early 2022, ending at 4,521 million USD in Q1 2022.
- Current liabilities
- Current liabilities follow a somewhat stable but moderately rising pattern. Beginning at 4,800 million USD in Q1 2018, liabilities decrease notably to 3,713 million USD by Q1 2019. From then onwards, they show a gradual increase with some volatility, reaching a peak of 5,041 million USD in Q4 2020. The amounts then stabilize around the mid-4,000 millions range throughout 2021 and the beginning of 2022, finishing at 4,408 million USD in Q1 2022.
- Quick ratio
- The quick ratio displays considerable variability, reflecting changes in both liquid assets and current liabilities. Initially, it remains near unity in early 2018 (0.95 to 1.03), indicating a balanced short-term liquidity position. A substantial increase occurs in Q4 2018, where the ratio peaks at 1.25, followed by a further increase and volatility throughout 2019, peaking at 1.66 by year-end. The ratio reaches its highest point at 2.04 in Q3 2020, indicative of very strong liquidity during that quarter. After this peak, the quick ratio declines sharply to 1.14 in Q4 2020, then moves within the 1.19 to 1.33 range during 2021 and recent 2022 data, suggesting relatively stable but reduced liquidity compared to the peak in 2020.
Overall, the patterns indicate periods of liquidity strengthening, particularly in late 2019 and mid-2020, with the company largely maintaining quick ratios above 1 thereafter. The steep decline in quick assets and quick ratio after Q3 2020 suggests a strategic shift or utilization of liquid resources. Current liabilities remained within a narrower range but showed signs of moderate increase toward late 2020 before stabilization.
Cash Ratio
Stryker Corp., cash ratio calculation (quarterly data)
| Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Cash and cash equivalents | 1,458) | 2,944) | 2,563) | 2,241) | 2,238) | 2,943) | 7,083) | 6,539) | 3,964) | 4,337) | 1,948) | 1,754) | 1,674) | 3,616) | 1,918) | 1,641) | 2,179) | ||||||
| Marketable securities | 72) | 75) | 76) | 84) | 74) | 81) | 78) | 80) | 84) | 88) | 88) | 85) | 84) | 83) | 292) | 279) | 276) | ||||||
| Total cash assets | 1,530) | 3,019) | 2,639) | 2,325) | 2,312) | 3,024) | 7,161) | 6,619) | 4,048) | 4,425) | 2,036) | 1,839) | 1,758) | 3,699) | 2,210) | 1,920) | 2,455) | ||||||
| Current liabilities | 4,408) | 4,549) | 4,449) | 4,252) | 3,953) | 5,041) | 4,689) | 4,405) | 4,162) | 4,400) | 3,921) | 3,946) | 3,713) | 4,807) | 4,153) | 4,046) | 4,800) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Cash ratio1 | 0.35 | 0.66 | 0.59 | 0.55 | 0.58 | 0.60 | 1.53 | 1.50 | 0.97 | 1.01 | 0.52 | 0.47 | 0.47 | 0.77 | 0.53 | 0.47 | 0.51 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||
| Abbott Laboratories | 0.65 | 0.78 | 0.75 | 0.71 | 0.67 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | 0.86 | 0.95 | 0.97 | 0.97 | 1.08 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | 3.58 | 3.66 | 3.98 | 4.42 | 5.04 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | 1.36 | 1.27 | 1.17 | 1.18 | 0.99 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | 0.37 | 0.36 | 0.35 | 0.35 | 0.33 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 1,530 ÷ 4,408 = 0.35
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals significant fluctuations in the company's liquidity and short-term financial position over the observed period.
- Total Cash Assets
- Total cash assets demonstrated considerable volatility from March 2018 to March 2022. There was an initial decline from 2,455 million USD in March 2018 to 1,758 million USD by March 2019. This was followed by a substantial increase reaching a peak at 7,161 million USD in September 2020, indicating strong cash accumulation during this period. However, after this peak, the cash assets substantially decreased again to 1,530 million USD by March 2022. These fluctuations suggest periods of both aggressive cash generation and subsequent cash deployment or usage.
- Current Liabilities
- Current liabilities remained relatively stable throughout the timeframe with minor fluctuations. Starting at 4,800 million USD in March 2018, the liabilities decreased slightly to around 3,713 million USD by March 2019, then oscillated around the 4,000 to 4,500 million USD range for the majority of the period, ending at 4,408 million USD in March 2022. The consistency in current liabilities reflects a stable short-term debt structure without drastic changes or increases in obligations.
- Cash Ratio
- The cash ratio, a measure of the company's ability to cover current liabilities with cash assets, exhibited marked variation in line with the trends in cash assets. Initially, the ratio hovered between 0.47 and 0.53 during 2018, indicating less than half coverage of current liabilities by cash. This ratio improved significantly in late 2019 and early 2020, reaching a peak of 1.53 in September 2020, suggesting the company held more cash than its short-term liabilities at that time. Subsequently, the cash ratio declined again to 0.35 by March 2022, reflecting a reduction in cash reserves relative to current liabilities and potentially increased financial risk in terms of liquidity.
Overall, the financial data indicates periods of strong cash accumulation that temporarily enhanced liquidity reserves, followed by phases where cash levels decreased despite relatively stable obligations. This pattern signifies active cash management strategies, possibly involving investments, debt repayments, or other uses of cash that affected the liquidity position over the quarter-to-quarter timeline.