Johnson & Johnson (JNJ)

Liquidity ratios

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
Current ratio 1.11 1.03 1.07 1.17 1.16 1.21 1.12 1.07 0.99 1.43 1.42 1.39 1.35 1.34 1.39 1.28 1.21 1.48 1.25 1.31
Quick ratio 0.79 0.70 0.77 0.84 0.91 0.86 0.84 0.54 0.70 0.75 0.73 0.70 1.08 0.70 0.65 0.60 0.59 0.79 0.52 0.53
Cash ratio 0.50 0.39 0.47 0.54 0.59 0.53 0.53 0.54 0.41 0.75 0.73 0.70 0.74 0.70 0.65 0.60 0.59 0.79 0.52 0.53

Based on the provided data, the current ratio of Johnson & Johnson has shown some fluctuations over the years, ranging from a high of 1.48 in September 2020 to a low of 0.99 in December 2022. Generally, a current ratio above 1 indicates that the company has more current assets than current liabilities, which is positive for short-term liquidity.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also witnessed some variability, with a peak of 1.08 in December 2021 and a low of 0.52 in June 2020. A quick ratio above 1 is considered healthy, as it suggests the company can cover its short-term obligations without relying on selling inventory.

The cash ratio, representing the most conservative liquidity measure by considering only cash and cash equivalents, has fluctuated as well, with a high of 0.74 in December 2021 and a low of 0.39 in September 2024. A cash ratio above 0.50 is typically seen as favorable, indicating the company holds sufficient liquid resources to meet its short-term liabilities.

Overall, while there have been some fluctuations in the liquidity ratios of Johnson & Johnson over the years, the company generally maintained acceptable levels of liquidity to meet its short-term obligations. However, the decreasing trend in the current ratio towards the end of the period and the lower cash ratio in the later years may warrant further monitoring to ensure continued liquidity sustainability.

See also:

Johnson & Johnson Liquidity Ratios (Quarterly Data)

Additional liquidity measure

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 conversion cycle days 75.33 91.80 89.20 81.92 74.12 86.14 92.55 25.84 70.05 9.39 9.94 10.07 55.65 8.86 8.78 9.47 -1.06 23.21 24.31 13.03

The cash conversion cycle of Johnson & Johnson demonstrates fluctuations over the years, indicating the efficiency of the company in managing its cash flow and working capital.

Between December 31, 2020, and December 31, 2021, there was a significant increase in the cash conversion cycle from -1.06 days to 55.65 days. This suggests a delay in collecting cash from sales and an increase in the time taken to convert inventory into cash during this period.

However, from December 31, 2021, to June 30, 2022, the company managed to reduce its cash conversion cycle from 55.65 days to 9.94 days, reflecting an improvement in managing its working capital and cash flow efficiency.

The cash conversion cycle increased notably from June 30, 2022, to June 30, 2023, reaching its peak at 92.55 days. This suggests possible challenges in managing inventories, accounts receivable, and accounts payable during this period.

From June 30, 2023, to December 31, 2024, the cash conversion cycle remained elevated above 75 days, indicating that Johnson & Johnson may be facing difficulties in efficiently managing its working capital, particularly in terms of collection of receivables and the conversion of inventory into cash.

Overall, the fluctuating trend in Johnson & Johnson's cash conversion cycle highlights the importance of monitoring and improving the company's cash flow management practices to sustain healthy working capital levels.