Medtronic PLC (MDT)
Liquidity ratios
| Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | Apr 30, 2022 | |
|---|---|---|---|---|---|
| Current ratio | 2.03 | 2.03 | 2.39 | 2.39 | 1.86 |
| Quick ratio | 0.74 | 1.31 | 0.88 | 1.54 | 0.85 |
| Cash ratio | 0.74 | 0.74 | 0.88 | 0.88 | 0.85 |
Medtronic PLC's current ratio has shown an increasing trend over the years, improving from 1.86 in April 30, 2022, to 2.39 in both April 28, 2023 and April 30, 2023, before declining slightly to 2.03 in both April 26, 2024 and April 30, 2024. This indicates the company's ability to cover its short-term obligations with its current assets has generally strengthened, although a slight decrease was observed more recently.
In terms of the quick ratio, Medtronic PLC experienced fluctuations in its liquidity position. The ratio was at a relatively low 0.85 in April 30, 2022, followed by a significant improvement to 1.54 in April 28, 2023. However, the quick ratio decreased to 0.88 in April 30, 2023, then increased to 1.31 in April 26, 2024, before declining to 0.74 in April 30, 2024. These fluctuations suggest that the company's ability to meet its short-term liabilities with its most liquid assets has been varied.
Lastly, the cash ratio remained relatively stable around the 0.85 to 0.88 range from April 30, 2022, to April 30, 2023, before decreasing to 0.74 in both April 26, 2024 and April 30, 2024. This ratio indicates the proportion of the company's current liabilities that could be covered by its cash and cash equivalents. The slight decline in the cash ratio suggests a decreased ability to cover short-term obligations with readily available cash in the most recent periods.
See also:
Additional liquidity measure
| Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | Apr 30, 2022 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 169.78 | 109.84 | 180.24 | 110.48 | 166.08 |
The cash conversion cycle of Medtronic PLC has shown fluctuating trends over the past few years. As of April 26, 2024, the company's cash conversion cycle stands at 109.84 days, indicating that it takes approximately 110 days for Medtronic to convert its investments in inventory back into cash through sales. This is a positive sign as a lower cash conversion cycle suggests efficient management of working capital.
Comparing this figure to historical data, the company has experienced improvements in its cash conversion cycle from April 30, 2022, to April 26, 2024. There was a significant reduction from 166.08 days in April 2022 to 109.84 days in April 2024, which reflects a faster conversion of inventory into sales and ultimately into cash during this period.
However, it is worth noting that there was a slight increase in the cash conversion cycle in April 30, 2023, and April 30, 2024, compared to the previous years' figures. This increase may be attributed to various factors such as changes in operating efficiency, inventory management, or sales performance.
Overall, a lower cash conversion cycle is generally favorable as it signifies that the company is managing its working capital effectively and efficiently converting inventory into cash. Medtronic PLC's improving trend in the cash conversion cycle indicates potential strengths in its operational processes and working capital management.