Becton Dickinson and Company (BDX)
Cash ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,717,000 | 1,416,000 | 1,006,000 | 2,283,000 | 2,825,000 |
| Short-term investments | US$ in thousands | 445,000 | 8,000 | 8,000 | 12,000 | 20,000 |
| Total current liabilities | US$ in thousands | 8,956,000 | 6,641,000 | 7,811,000 | 6,626,000 | 5,836,000 |
| Cash ratio | 0.24 | 0.21 | 0.13 | 0.35 | 0.49 |
September 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,717,000K
+ $445,000K)
÷ $8,956,000K
= 0.24
The cash ratio of Becton Dickinson and Company has shown fluctuations over the past five years. In 2020, the cash ratio was at its highest level of 0.49, indicating that the company had a higher proportion of cash and cash equivalents relative to its current liabilities. However, there has been a downward trend in the cash ratio since then, with 2022 showing the lowest ratio of 0.13.
A cash ratio of less than 1 suggests that the company may not have enough liquid assets to cover its short-term liabilities, which could potentially signal liquidity concerns. The increasing ratio in 2023 and 2024 indicates a positive trend towards a stronger liquidity position.
It is important to note that while a higher cash ratio is generally desirable as it indicates a better ability to meet short-term obligations, an excessively high ratio may suggest that the company is not efficiently utilizing its cash resources. Therefore, it is crucial for Becton Dickinson to strike a balance in maintaining an optimal cash ratio to ensure liquidity while also investing in growth opportunities.
Peer comparison
Sep 30, 2024