McKesson Corporation (MCK)

Cash ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Cash and cash equivalents	US$ in thousands	4,583,000	4,678,000	3,532,000	6,278,000	4,015,000
Short-term investments	US$ in thousands	240,000	237,000	346,000	269,000	170,000
Total current liabilities	US$ in thousands	52,357,000	47,957,000	48,466,000	44,103,000	42,624,000
Cash ratio		0.09	0.10	0.08	0.15	0.10

March 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($4,583,000K + $240,000K) ÷ $52,357,000K
= 0.09

The cash ratio for McKesson Corporation has fluctuated over the past five years, ranging from 0.08 to 0.15. This ratio indicates the company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio suggests a greater ability to meet its short-term obligations without relying on external sources of funding.

Although the cash ratio decreased from 0.15 in 2021 to 0.09 in 2024, it remains relatively stable around the 0.10 mark. This may indicate that McKesson has maintained a healthy level of cash reserves compared to its current liabilities in recent years. However, a slight decline in the cash ratio in 2024 may warrant further investigation to understand the underlying reasons for the decrease and any potential implications for the company's liquidity position.