McKesson Corporation (MCK)
Liquidity ratios
| Mar 31, 2025 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.90 | 0.88 | 0.91 | 0.93 | 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 |
| Quick ratio | 0.51 | 0.46 | 0.47 | 0.46 | 0.50 | 0.48 | 0.49 | 0.51 | 0.50 | 0.49 | 0.48 | 0.47 | 0.46 | 0.44 | 0.48 | 0.52 | 0.58 | 0.54 | 0.52 | 0.53 |
| Cash ratio | 0.09 | 0.02 | 0.04 | 0.04 | 0.09 | 0.04 | 0.05 | 0.05 | 0.10 | 0.06 | 0.06 | 0.05 | 0.07 | 0.06 | 0.05 | 0.06 | 0.14 | 0.09 | 0.07 | 0.07 |
McKesson Corporation's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, indicate varying levels of liquidity over the reported periods.
The current ratio, which measures the company's ability to pay off its current liabilities with its current assets, shows a declining trend from 1.00 in June 30, 2020, to 0.90 in March 31, 2025. This suggests that McKesson may have difficulties in meeting its short-term obligations in the latter periods.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also displays a decreasing trend from 0.53 in June 30, 2020, to 0.51 in March 31, 2025. This indicates a potential challenge for McKesson to swiftly meet its short-term liabilities without relying on inventory liquidation.
The cash ratio, which assesses the company's ability to cover its current liabilities with cash and cash equivalents, fluctuates throughout the reporting periods. It ranges from 0.02 to 0.14, with the highest value observed on March 31, 2021. This suggests that McKesson may have periods of stronger cash position.
Overall, these liquidity ratios point towards a need for McKesson Corporation to effectively manage its liquidity position to ensure it can meet its short-term obligations and maintain financial flexibility.
See also:
Additional liquidity measure
| Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -8.04 | -1.09 | -5.58 | -4.06 | -6.44 | -3.22 | -4.33 | -3.44 | -5.88 | -2.78 | -2.77 | -1.82 | -2.51 | -1.11 | -0.72 | 1.25 | -2.46 | 0.99 | 0.77 | 0.41 |
The cash conversion cycle of McKesson Corporation has shown fluctuations over the years, indicating changes in the efficiency of the company's cash management and working capital management. The negative values seen in recent periods suggest that McKesson is able to convert its investments in inventory and accounts receivable into cash at a faster rate than it pays its accounts payable. This potentially indicates that the company is managing its working capital well and has optimized its processes to improve cash flow efficiency. However, in earlier periods, the positive values indicate a longer cash conversion cycle, which may have led to tied-up capital and reduced liquidity. Overall, the trend towards more negative values in the cash conversion cycle is a positive sign for McKesson's financial health and operational efficiency.