CVS Health Corp (CVS)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.86 | 0.86 | 0.86 | 0.92 | 0.95 | 0.94 | 0.91 | 0.88 | 0.88 | 0.94 | 0.95 | 0.93 | 0.91 | 0.95 | 0.98 | 0.99 | 0.94 | 0.92 | 0.95 | 0.95 |
| Quick ratio | 0.64 | 0.63 | 0.62 | 0.64 | 0.67 | 0.68 | 0.65 | 0.58 | 0.59 | 0.63 | 0.62 | 0.58 | 0.56 | 0.63 | 0.67 | 0.65 | 0.56 | 0.56 | 0.56 | 0.57 |
| Cash ratio | 0.14 | 0.20 | 0.21 | 0.24 | 0.23 | 0.28 | 0.22 | 0.16 | 0.18 | 0.20 | 0.17 | 0.15 | 0.18 | 0.19 | 0.27 | 0.21 | 0.15 | 0.14 | 0.17 | 0.16 |
The liquidity ratios of CVS Health Corp, as indicated by the current ratio, quick ratio, and cash ratio, show varying trends over the past eight quarters.
The current ratio has fluctuated between 0.86 and 0.94, with a downward trend in recent quarters, reaching a low of 0.86 in Q4 2023. This suggests that the company may be experiencing challenges in meeting its short-term obligations with its current assets.
Similarly, the quick ratio has also exhibited a downward trend, ranging from 0.62 to 0.67 over the same period. The decreasing trend indicates that CVS Health Corp may have a decreasing ability to cover its immediate liabilities with its most liquid assets, such as cash and equivalents.
The cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has shown volatility but has generally been decreasing over the past two years. The ratio declined from 0.31 in Q3 2022 to 0.18 in Q4 2023, indicating potential challenges in the company's cash position to meet its short-term obligations.
Overall, the liquidity ratios of CVS Health Corp suggest that the company may be facing pressures in terms of its ability to quickly convert assets into cash to meet its short-term financial commitments. Management should closely monitor liquidity levels and take appropriate actions to ensure the company's financial health and stability.
See also:
CVS Health Corp Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 42.80 | 40.42 | 38.62 | 39.77 | 39.28 | 38.17 | 40.00 | 41.61 | 40.94 | 41.90 | 42.29 | 44.32 | 42.15 | 44.81 | 43.90 | 45.17 | 40.85 | 46.19 | 43.65 | 50.22 |
The cash conversion cycle of CVS Health Corp has shown some fluctuations over the last eight quarters. In Q1 2022, the cash conversion cycle was at its highest at 43.17 days, indicating a longer time taken to convert cash invested in the business back into cash inflows. Subsequently, there was an improvement in efficiency as the cycle decreased in Q2 and Q3 2022 to 40.40 days and 38.35 days, respectively.
However, in Q4 2022, there was a slight increase in the cycle to 38.76 days, before rising further in Q1 2023 to 41.57 days. Despite this increase, there was a significant improvement in Q2 2023 with the cycle declining to 38.71 days. This trend continued into Q3 2023 and Q4 2023 with further reductions to 39.87 days and 41.20 days, respectively.
Overall, the cash conversion cycle of CVS Health Corp has shown variability but has generally been within a relatively narrow range over the analyzed period. Efforts to manage working capital effectively to minimize the cycle duration can help improve the company's liquidity and operational efficiency.