McKesson Corporation (MCK)

Liquidity ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019
Current ratio 0.92 0.92 0.93 0.94 0.92 0.93 0.96 0.96 0.95 0.98 0.99 0.99 1.03 1.01 0.99 1.00 0.99 0.98 1.01 1.01
Quick ratio 0.51 0.49 0.49 0.51 0.51 0.49 0.48 0.47 0.46 0.45 0.49 0.52 0.58 0.54 0.53 0.53 0.56 0.52 0.55 0.56
Cash ratio 0.09 0.04 0.05 0.06 0.10 0.06 0.07 0.05 0.08 0.07 0.05 0.06 0.15 0.09 0.08 0.07 0.09 0.05 0.04 0.05

McKesson Corporation's liquidity ratios indicate the company's ability to meet its short-term obligations. The current ratio has been relatively stable over the past several quarters, ranging from 0.92 to 1.03. This suggests that the company may have had some challenges in maintaining a healthy balance between its current assets and liabilities, as a ratio below 1 indicates a potential difficulty in meeting short-term obligations.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has shown some fluctuation but has generally remained below 1. This indicates that the company may have limited ability to cover its short-term liabilities using its most liquid assets.

The cash ratio, reflecting the proportion of cash and cash equivalents to current liabilities, has varied significantly over the quarters, ranging from 0.04 to 0.15. While the cash ratio increased significantly in some quarters, it has also been comparatively low, indicating that the company may have had challenges in maintaining high levels of cash reserves relative to its current liabilities.

Overall, McKesson Corporation's liquidity ratios suggest that the company may need to focus on improving its short-term liquidity position to ensure it can meet its financial obligations in a timely manner. It may be beneficial for the company to closely monitor its working capital management and consider strategies to enhance its liquidity position.

See also:

McKesson Corporation Liquidity Ratios (Quarterly Data)

Additional liquidity measure

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019
Cash conversion cycle days -5.50 -2.22 -3.31 -2.46 -4.87 -1.60 -1.47 -0.43 -1.09 0.76 1.93 3.56 -0.11 3.08 2.06 1.63 -1.10 3.61 3.05 1.45

The cash conversion cycle for McKesson Corporation has fluctuated over the past few quarters, indicating variability in the company's efficiency in managing its working capital. The negative values observed in recent quarters signify that McKesson Corporation has been able to convert its investments in inventory into cash quickly, which is a positive indicator.

In the most recent quarter ending March 31, 2024, the cash conversion cycle stood at -5.50 days, indicating that McKesson Corporation was able to efficiently manage its working capital by reducing the time taken to sell inventory and collect payments from customers.

However, it is important to note that the cash conversion cycle has not consistently shown improvement, as there have been quarters where the company experienced positive cash conversion cycles. For instance, in the quarter ending March 31, 2021, the cash conversion cycle was -0.11 days, slightly above breakeven, indicating potential challenges in working capital management during that period.

Overall, while McKesson Corporation has shown periods of strong efficiency in its cash conversion cycle, the variability in the ratios over time suggests the need for continued monitoring and strategic management of working capital to ensure optimal financial performance.