Bristol-Myers Squibb Company (BMY)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 11,464,000 | 9,123,000 | 13,979,000 | 14,546,000 | 12,346,000 |
| Short-term investments | US$ in thousands | 1,275,000 | 1,234,000 | 5,006,000 | 4,737,000 | 5,242,000 |
| Total current liabilities | US$ in thousands | 22,262,000 | 21,890,000 | 21,868,000 | 19,080,000 | 18,304,000 |
| Cash ratio | 0.57 | 0.47 | 0.87 | 1.01 | 0.96 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($11,464,000K
+ $1,275,000K)
÷ $22,262,000K
= 0.57
The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of funding.
Analyzing Bristol-Myers Squibb Co.'s cash ratio from 2019 to 2023, we observe fluctuations in the ratio. The ratio decreased from 0.95 in 2019 to 0.81 in 2023. This decline suggests that the company may have utilized more of its cash reserves to cover its short-term obligations over the years.
While the cash ratio decreased overall, it still remained above 1 in 2020 and 2021, indicating that Bristol-Myers Squibb Co. had more than enough cash to cover its short-term liabilities during these periods. However, the ratio dropped below 1 in 2022 and 2023, signaling a potential increased risk in not having sufficient cash on hand to meet short-term financial obligations without resorting to external financing.
In conclusion, Bristol-Myers Squibb Co.'s cash ratio trend indicates some variability in its ability to cover short-term liabilities with available cash over the past five years. Further analysis of the company's cash management practices and financial strategy may be warranted to address the fluctuations in the cash ratio.
Peer comparison
Dec 31, 2023