Baxter International Inc (BAX)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.36 | 1.48 | 1.69 | 2.09 | 2.52 |
| Quick ratio | 0.27 | 0.49 | 0.36 | 0.70 | 1.12 |
| Cash ratio | 0.27 | 0.49 | 0.36 | 0.70 | 1.12 |
Baxter International Inc's liquidity ratios have shown a decline over the years based on the provided data.
- The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has decreased from 2.52 in 2020 to 1.36 in 2024. This indicates that the company may have a lower capacity to meet its short-term liabilities as compared to its current assets.
- The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also seen a significant decline from 1.12 in 2020 to 0.27 in 2024. This suggests that Baxter International Inc may have limited immediate resources to cover its short-term obligations without relying on inventory.
- The cash ratio, which is the most conservative measure of liquidity as it compares cash and cash equivalents to current liabilities, has followed a similar downward trend from 1.12 in 2020 to 0.27 in 2024. This highlights a potential reduction in the company's ability to settle its short-term debts solely with its available cash.
Overall, the decreasing trend in Baxter International Inc's liquidity ratios signals a potential liquidity risk and may require the company to closely monitor its cash flow management and working capital practices to ensure sufficient liquidity to meet its short-term obligations.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 265.57 | 104.77 | 102.11 | 116.60 | 98.69 |
The cash conversion cycle of Baxter International Inc has shown fluctuations over the years. As of December 31, 2020, the company had a cash conversion cycle of 98.69 days, indicating that on average, it took Baxter 98.69 days to convert its investments in inventory and accounts receivable into cash receipts from customers.
However, by December 31, 2021, the cash conversion cycle increased to 116.60 days, suggesting a longer period for the company to convert its resources into cash.
Subsequently, by December 31, 2022 and 2023, the cash conversion cycle improved to 102.11 days and 104.77 days respectively, indicating a quicker conversion of resources into cash.
Notably, by December 31, 2024, the cash conversion cycle significantly increased to 265.57 days, reflecting a substantial elongation in the company's cash conversion process.
Overall, it's important for Baxter International Inc to manage its cash conversion cycle effectively to optimize its working capital utilization and maintain a healthy liquidity position in the long run.