Medtronic PLC (MDT)
Liquidity ratios
| 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 | Apr 30, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 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 | 1.86 |
| Quick ratio | 0.67 | 0.66 | 0.76 | 0.74 | 1.31 | 0.85 | 1.46 | 0.80 | 1.42 | 0.87 | 1.51 | 0.88 | 1.54 | 0.77 | 1.18 | 0.79 | 1.18 | 0.63 | 1.01 | 0.85 |
| Cash ratio | 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 | 0.85 |
Medtronic PLC's liquidity ratios have shown fluctuating trends over the past few years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been above 1, indicating that the company has enough current assets to cover its current liabilities. The current ratio improved steadily from around 1.58 in mid-2022 to 2.30 in early 2024 before declining slightly to 1.90 by January 31, 2025.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown variability. The quick ratio ranged from 0.63 to 1.54 during the period under review, indicating that Medtronic may face some challenges in meeting its short-term obligations without relying on inventory in some periods. The quick ratio improved towards the end of the review period, standing at 0.67 by January 31, 2025.
The cash ratio, which provides the most conservative measure of liquidity by considering only cash and cash equivalents to cover current liabilities, mirrored the trends in the quick ratio. The cash ratio ranged from 0.63 to 0.88 during the analysis period, indicating that Medtronic has maintained a reasonable level of cash reserves to cover its short-term obligations. The cash ratio was 0.67 as of January 31, 2025.
Overall, while there have been fluctuations in the liquidity ratios of Medtronic PLC, the company has generally maintained a solid liquidity position with current assets to cover short-term obligations. However, investors and stakeholders should continue to monitor these ratios to ensure that the company's liquidity position remains healthy and sustainable.
See also:
Additional liquidity measure
| 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 | Apr 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 166.21 | 122.95 | 122.72 | 101.14 | 122.72 | 119.87 | 148.26 | 122.73 | 143.88 | 117.19 | 134.40 | 108.59 | 123.18 | 117.93 | 140.24 | 111.02 | 129.44 | 97.83 | 117.60 | 97.15 |
The cash conversion cycle of Medtronic PLC has shown fluctuations over the period from April 2022 to January 2025. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales and back into cash.
The trend in Medtronic's cash conversion cycle indicates the company's efficiency in managing its working capital. A lower cash conversion cycle is generally favorable as it implies that the company is able to generate cash quickly from its operating activities.
In April 2022, the cash conversion cycle was 97.15 days, indicating the time taken by Medtronic to convert its investments into cash. The cycle increased to 117.60 days by July 2022, reflecting a potential delay in the conversion process. However, it improved to 97.83 days by July 31, 2022, suggesting a more efficient cash conversion approach.
Subsequently, the cash conversion cycle trended upwards, reaching 148.26 days in January 2024, which could indicate longer cash conversion periods and potential liquidity challenges. The cycle decreased to 101.14 days by April 30, 2024, demonstrating a positive change in cash conversion efficiency.
In general, the cash conversion cycle values for Medtronic PLC demonstrate variability, with some periods showing better efficiency in managing working capital and converting investments into cash than others. Analyzing these trends can provide insights into the company's financial health and operational efficiency in managing its cash flows.