Globus Medical (GMED)

Quick ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cash	US$ in thousands	784,438	622,766	410,424	354,062	467,292	279,620	306,452	217,685	150,466	134,223	150,772	229,789	193,069	361,876	268,783	184,848	239,397	250,607	165,554	166,742
Short-term investments	US$ in thousands	105,619	71,940	82,509	80,408	50,497	189,314	306,376	286,685	295,592	271,063	257,238	243,505	250,378	191,319	191,644	218,711	187,344	159,030	151,181	110,211
Receivables	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total current liabilities	US$ in thousands	855,913	818,065	794,146	786,324	392,347	428,722	155,220	167,547	159,204	145,255	146,017	141,491	140,164	122,525	130,042	123,677	120,792	99,980	106,126	97,962
Quick ratio		1.04	0.85	0.62	0.55	1.32	1.09	3.95	3.01	2.80	2.79	2.79	3.35	3.16	4.51	3.54	3.26	3.53	4.10	2.98	2.83

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, is a financial metric used to evaluate a company's short-term liquidity and ability to meet its immediate obligations without relying on the sale of inventory. It is calculated by dividing current assets excluding inventory by current liabilities. A quick ratio of 1 or higher is generally considered healthy as it indicates that a company has enough liquid assets to cover its short-term liabilities.

Analyzing the quick ratio of Globus Medical based on the provided data, we can observe fluctuations over the reporting periods. The quick ratio has shown a relatively stable trend initially, ranging between 2.79 and 4.51 from March 2020 to September 2021. This indicates that the company had strong liquidity and was able to meet its short-term obligations comfortably during this period.

However, there was a significant decline in the quick ratio in the subsequent quarters, dropping to 1.09 by September 30, 2023. This sharp decrease suggests a potential liquidity strain, as the company may have had difficulty meeting its short-term liabilities without relying on inventory liquidation. The quick ratio improved slightly by December 31, 2023, and continued to increase gradually in the following quarters, reaching 1.04 by December 31, 2024.

Overall, the fluctuation in Globus Medical's quick ratio indicates varying levels of liquidity and ability to cover short-term obligations without inventory sales. It would be important for stakeholders to further investigate the reasons behind the decline in the quick ratio in 2023 and monitor the company's liquidity position going forward.