Boston Scientific Corp (BSX)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 865,000 | 928,000 | 1,925,000 | 1,734,000 | 217,000 |
| Short-term investments | US$ in thousands | — | 2,000 | 10,000 | 414,000 | 1,000 |
| Total current liabilities | US$ in thousands | 4,933,000 | 3,803,000 | 4,274,000 | 3,681,000 | 4,866,000 |
| Cash ratio | 0.18 | 0.24 | 0.45 | 0.58 | 0.04 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($865,000K
+ $—K)
÷ $4,933,000K
= 0.18
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 liquidity position.
Analyzing the trend of Boston Scientific Corp.'s cash ratio over the past five years, we observe a fluctuating pattern. The ratio was consistently above 0.5 from 2020 to 2022, indicating the company had sufficient cash to cover its short-term obligations during those years.
The cash ratio declined significantly in 2019 to 0.27, suggesting a potential liquidity strain for the company at that time. However, the ratio rebounded in the following years, reaching its peak of 0.73 in 2020.
The subsequent decrease in the cash ratio from 2020 to 2023 may raise concerns about Boston Scientific Corp.'s liquidity position in more recent years. A cash ratio of 0.34 in 2023 indicates a lower ability to meet short-term liabilities with cash on hand compared to previous years.
Overall, fluctuations in the cash ratio of Boston Scientific Corp. highlight the importance of monitoring the company's liquidity position to ensure it can meet its short-term financial obligations effectively.
Peer comparison
Dec 31, 2023