Becton Dickinson and Company (BDX)
Liquidity ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.17 | 1.31 | 1.04 | 1.33 | 1.54 |
| Quick ratio | 0.58 | 0.60 | 0.41 | 0.72 | 0.90 |
| Cash ratio | 0.24 | 0.21 | 0.13 | 0.35 | 0.49 |
Based on the data provided for Becton Dickinson and Company, the liquidity ratios display fluctuations over the past five years. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has shown a downward trend over the period from 1.54 in 2020 to 1.17 in 2024. This indicates a potential decrease in the company's ability to meet its short-term liabilities with its current assets.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also demonstrates a decline from 0.90 in 2020 to 0.58 in 2024. This suggests a decreasing ability to meet immediate obligations without relying on selling inventory.
The cash ratio, which is the most conservative liquidity ratio as it focuses solely on the company's cash and cash equivalents to cover short-term liabilities, also exhibits a downward trajectory from 0.49 in 2020 to 0.24 in 2024.
Overall, the decreasing trend in all three liquidity ratios for Becton Dickinson and Company may raise concerns about the company's short-term liquidity position. It is important for the company to closely monitor its liquidity management to ensure it can meet its financial obligations in a timely manner.
See also:
Becton Dickinson and Company Liquidity Ratios
Additional liquidity measure
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 94.78 | 80.33 | 75.80 | 69.08 | 114.08 |
The cash conversion cycle of Becton Dickinson and Company has shown fluctuating trends over the past five years. In 2024, the cash conversion cycle increased to 94.78 days from 80.33 days in 2023. This indicates that it took the company longer to convert its investment in inventory into cash receipts from customers. This could imply potential inefficiencies in managing inventory levels or collecting cash from sales.
Comparing to the prior years, the cash conversion cycle has generally improved from 114.08 days in 2020 to 69.08 days in 2021 and has since increased. A decreasing trend in the cash conversion cycle is typically considered positive as it indicates that the company is able to convert its resources into cash more efficiently.
Further analysis would be required to understand the specific factors driving these changes and to determine whether the current level of the cash conversion cycle is in line with industry norms or if there are areas for improvement in working capital management.