Globus Medical (GMED)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 784,438 | 467,292 | 150,466 | 193,069 | 239,397 |
| Short-term investments | US$ in thousands | 105,619 | 50,497 | 295,592 | 250,378 | 187,344 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 855,913 | 392,347 | 159,204 | 140,164 | 120,792 |
| Quick ratio | 1.04 | 1.32 | 2.80 | 3.16 | 3.53 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($784,438K
+ $105,619K
+ $—K)
÷ $855,913K
= 1.04
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of 1 or higher is generally considered healthy as it indicates that a company can cover its current liabilities without relying heavily on inventory.
Based on the provided data for Globus Medical, the quick ratio has shown a decreasing trend over the years. In December 31, 2020, the quick ratio was 3.53, indicating a strong liquidity position. However, this ratio decreased to 3.16 by December 31, 2021, and further dropped to 2.80 by December 31, 2022.
By December 31, 2023, the quick ratio fell significantly to 1.32, indicating a potential liquidity strain as the company's ability to cover its short-term obligations with its liquid assets declined. The trend continued, with the quick ratio decreasing to 1.04 by December 31, 2024, which raises concerns about the company's short-term liquidity position.
Overall, the decreasing trend in Globus Medical's quick ratio suggests a potential weakening in its ability to meet short-term obligations with its most liquid assets. It would be important for stakeholders to monitor this trend and assess the company's ability to manage its liquidity effectively in the future.
Peer comparison
Dec 31, 2024