Medtronic PLC (MDT)
Liquidity ratios
| Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | Apr 24, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 2.03 | 2.39 | 1.86 | 2.65 | 2.13 |
| Quick ratio | 1.31 | 1.54 | 1.30 | 1.91 | 1.50 |
| Cash ratio | 0.74 | 0.88 | 0.85 | 1.27 | 1.06 |
The liquidity ratios of Medtronic PLC for the past five years indicate the company's ability to meet its short-term obligations and manage its current assets efficiently.
1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its current assets. Medtronic's current ratio has fluctuated over the years, with a high of 2.65 in 2021 and a low of 1.86 in 2022. A current ratio above 1 indicates that the company has more current assets than current liabilities, which is generally seen as a positive sign. However, a ratio that is too high may suggest inefficiencies in asset management.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Medtronic's quick ratio has also varied across the years, with a peak of 1.91 in 2021 and a low of 1.30 in 2022. A quick ratio above 1 indicates that the company can meet its short-term liabilities without relying on selling inventory, which is considered a good sign.
3. Cash Ratio: The cash ratio is the most conservative liquidity measure as it only considers cash and cash equivalents to cover short-term liabilities. Medtronic's cash ratio has fluctuated as well, with a high of 1.27 in 2021 and a low of 0.74 in 2024. A cash ratio below 1 indicates that the company may need to rely on sources other than cash to cover its short-term obligations.
Overall, while Medtronic PLC's liquidity ratios have fluctuated over the past five years, the company generally maintains healthy liquidity levels that suggest a strong ability to meet its short-term obligations. Investors and analysts should continue to monitor these ratios to ensure that the company maintains a strong financial position in the future.
See also:
Additional liquidity measure
| Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | Apr 24, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 109.84 | 110.48 | 102.09 | 104.96 | 100.00 |
The cash conversion cycle for Medtronic PLC has shown some fluctuations over the past five years. In the most recent fiscal year ending on April 26, 2024, the company's cash conversion cycle was 109.84 days, indicating that it takes approximately 109.84 days for Medtronic to convert its investments in inventory and accounts receivable into cash inflows from sales.
Comparing this figure to the previous years, we see that there was a slight improvement from the preceding year when the cash conversion cycle was 110.48 days. This suggests that Medtronic was able to manage its inventory and receivables more effectively in the latest year.
Looking further back, we notice that in fiscal year 2022, the cash conversion cycle was 102.09 days, showing a shorter period compared to the last two years. This indicates that Medtronic was more efficient in converting its assets into cash during that particular year.
Similarly, in fiscal year 2021, the cash conversion cycle was 104.96 days, while in fiscal year 2020, it stood at 100.00 days. These figures demonstrate fluctuations in Medtronic's working capital management over the five-year period, potentially influenced by changes in sales patterns, inventory management practices, and accounts receivable policies.
Overall, by monitoring and analyzing the cash conversion cycle, stakeholders can gain insights into Medtronic's operational efficiency, financial health, and liquidity management strategies over time.