Medtronic PLC (MDT)
Liquidity ratios
| Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Apr 26, 2024 | Jan 31, 2024 | Jan 26, 2024 | Oct 31, 2023 | Oct 27, 2023 | Jul 31, 2023 | Jul 28, 2023 | Apr 30, 2023 | Apr 28, 2023 | Jan 31, 2023 | Jan 27, 2023 | Oct 31, 2022 | Oct 28, 2022 | Jul 31, 2022 | Jul 29, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.85 | 1.90 | 1.84 | 2.13 | 2.03 | 2.03 | 2.30 | 2.30 | 2.29 | 2.29 | 2.42 | 2.42 | 2.39 | 2.39 | 1.76 | 1.76 | 1.76 | 1.76 | 1.58 | 1.58 |
| Quick ratio | 1.20 | 1.19 | 1.17 | 1.35 | 1.31 | 1.31 | 1.46 | 1.46 | 1.42 | 1.42 | 1.51 | 1.51 | 1.54 | 1.54 | 1.18 | 1.18 | 1.18 | 1.18 | 1.01 | 1.01 |
| Cash ratio | 0.70 | 0.67 | 0.66 | 0.76 | 0.74 | 0.74 | 0.85 | 0.85 | 0.80 | 0.80 | 0.87 | 0.87 | 0.88 | 0.88 | 0.77 | 0.77 | 0.79 | 0.79 | 0.63 | 0.63 |
Based on the provided data, we can analyze the liquidity ratios of Medtronic PLC over multiple periods. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, shows a general increasing trend from 1.58 in July 2022 to 2.13 in July 2024, before decreasing to 1.85 in April 2025. This indicates that Medtronic's short-term liquidity position improved over the analyzed periods, with a slight decline in the most recent period.
Moving on to the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, we observe a similar trend of improvement over time. The quick ratio increased from 1.01 in July 2022 to 1.35 in July 2024 before settling at 1.20 in April 2025. This suggests that Medtronic's ability to meet its short-term obligations using its most liquid assets has strengthened steadily over the periods under review.
Lastly, looking at the cash ratio, which is the most conservative liquidity measure as it considers only cash and cash equivalents in relation to current liabilities, we note a varying pattern. The cash ratio ranged from 0.63 in July 2022 to 0.76 in July 2024, with a slight dip to 0.70 in April 2025. This indicates some fluctuations in Medtronic's ability to cover its short-term liabilities solely with cash and cash equivalents, albeit within a relatively stable range.
Overall, the liquidity ratios of Medtronic PLC demonstrate a generally positive liquidity position over the analyzed periods, with improvements in the current and quick ratios, while the cash ratio exhibited moderate fluctuations. It is essential for investors and stakeholders to monitor these ratios to assess the company's ability to meet its short-term financial obligations effectively.
See also:
Additional liquidity measure
| Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Apr 26, 2024 | Jan 31, 2024 | Jan 26, 2024 | Oct 31, 2023 | Oct 27, 2023 | Jul 31, 2023 | Jul 28, 2023 | Apr 30, 2023 | Apr 28, 2023 | Jan 31, 2023 | Jan 27, 2023 | Oct 31, 2022 | Oct 28, 2022 | Jul 31, 2022 | Jul 29, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 194.66 | 165.71 | 135.65 | 134.77 | 119.66 | 122.72 | 146.72 | 148.26 | 146.08 | 143.88 | 134.70 | 134.40 | 119.84 | 123.18 | 140.34 | 140.24 | 132.32 | 129.44 | 116.99 | 117.60 |
The cash conversion cycle of Medtronic PLC has shown some fluctuations over the period from July 2022 to April 2025. The cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has ranged from a low of 116.99 days in July 2022 to a high of 194.66 days in April 2025.
Overall, during the period under review, the cash conversion cycle has generally been on the higher side, indicating that Medtronic may be facing challenges in efficiently managing its working capital. A longer cash conversion cycle can tie up the company's funds in inventory and accounts receivable for an extended period, potentially impacting its liquidity and cash flow.
It is crucial for Medtronic to closely monitor and effectively manage its cash conversion cycle to optimize its working capital management and ensure a healthy cash flow position. This may involve improving inventory turnover, streamlining accounts receivable collection processes, and negotiating favorable payment terms with suppliers to shorten the cycle and enhance the company's overall financial performance and stability.