Becton Dickinson and Company (BDX)

The liquidity ratios for Becton Dickinson & Co. indicate the company's ability to meet its short-term obligations using its current assets. The current ratio, which measures the company's ability to pay its short-term liabilities with its current assets, has fluctuated over the past five years, ranging from 1.04 to 1.54, with the latest ratio standing at 1.31. This indicates a moderate ability to cover short-term obligations.

The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity. The company's quick ratio has varied between 0.61 and 1.05 over the same period, with the latest ratio at 0.80. This suggests a somewhat lower ability to cover short-term liabilities without relying on selling inventory.

Furthermore, the cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has ranged from 0.30 to 0.64 over the last five years, with the current ratio at 0.42. This indicates that the company may have a limited ability to cover short-term obligations using only its cash resources.

Overall, the liquidity ratios for Becton Dickinson & Co. show some fluctuation but generally indicate a moderate to adequate ability to meet short-term obligations with its current assets, although the company may have a relatively lower cash reserve compared to its current liabilities.

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See also:

Becton Dickinson and Company Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle (CCC) for Becton Dickinson & Co. has shown fluctuating trends over the past five years. In 2023, the CCC increased to 100.92 days from 95.94 days in the previous year, indicating that the company took a longer period to convert its investments in inventory and other resources into cash. This may suggest potential inefficiencies in managing its working capital.

Comparing 2023 to 2021, the CCC has increased from 81.21 days to 100.92 days, indicating a notable deterioration in the company's ability to manage its cash resources. This could be a cause for concern, as it suggests a longer period to recover cash from its operating cycle.

In contrast, the CCC in 2020 was 104.24 days, higher than in 2023, indicating a temporary improvement in the company's cash management. However, the CCC has generally remained high over the last five years, reflecting a persistent challenge in efficiently converting investments into cash.

Overall, the increasing trend in the CCC over the past five years suggests that Becton Dickinson & Co. may need to focus on optimizing its working capital management and streamlining its cash conversion processes to improve overall liquidity and efficiency.