Medtronic PLC (MDT)

Cash ratio

		Apr 26, 2024	Apr 28, 2023	Apr 29, 2022	Apr 30, 2021	Apr 24, 2020
Cash and cash equivalents	US$ in thousands	1,284,000	1,543,000	3,714,000	3,593,000	4,140,000
Short-term investments	US$ in thousands	6,721,000	6,416,000	6,859,000	7,224,000	6,808,000
Total current liabilities	US$ in thousands	10,789,000	9,051,000	12,394,000	8,509,000	10,366,000
Cash ratio		0.74	0.88	0.85	1.27	1.06

April 26, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,284,000K + $6,721,000K) ÷ $10,789,000K
= 0.74

The cash ratio of Medtronic PLC has shown a fluctuating trend over the past five years, ranging from 0.74 to 1.27. The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations using cash on hand.

In the most recent year, as of April 26, 2024, the cash ratio was 0.74, indicating a decrease compared to the previous year. This suggests that Medtronic PLC may have reduced its cash reserves relative to its short-term liabilities. However, it is important to note that a cash ratio above 1.0 is generally considered healthy, as it implies the company has more cash on hand than its short-term obligations.

On the other hand, in April 30, 2021, the cash ratio was 1.27, the highest among the five years analyzed. This indicates that Medtronic PLC had a strong liquidity position at that time, with excess cash available to cover its short-term liabilities.

Overall, while the fluctuating trend in the cash ratio of Medtronic PLC suggests varying levels of liquidity over the years, maintaining a cash ratio above 1.0 would be beneficial to ensure the company's ability to meet its short-term financial obligations effectively.