Solventum Corp. (SOLV)
Cash ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 762,000 | 772,000 | 897,000 | 996,000 | 600,000 | 500,000 | 500,000 | -61,000 | 61,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — | — | — | 122,000 | — |
| Total current liabilities | US$ in thousands | 2,703,000 | 2,904,000 | 2,571,000 | 1,854,000 | 1,771,000 | 1,471,000 | 1,412,000 | 1,382,000 | 1,311,000 |
| Cash ratio | 0.28 | 0.27 | 0.35 | 0.54 | 0.34 | 0.34 | 0.35 | 0.04 | 0.05 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($762,000K
+ $—K)
÷ $2,703,000K
= 0.28
Solventum Corp.'s cash ratio has shown fluctuations over the analyzed period. The cash ratio measures a company's ability to cover its short-term liabilities with its most liquid assets, often indicating its liquidity position.
The cash ratio started at a relatively low level of 0.05 on December 31, 2022, indicating that Solventum Corp. had only $0.05 in cash and cash equivalents for every $1 of current liabilities. This suggests a potential liquidity risk, as the company may have difficulty meeting its short-term obligations.
However, there was a significant improvement in the cash ratio by March 31, 2024, where it reached 0.54, showing that Solventum Corp. had substantially increased its cash reserves relative to its current liabilities. This indicates a healthier liquidity position, with the company having $0.54 in cash and cash equivalents for every $1 of current liabilities.
Subsequently, the cash ratio decreased slightly by September 30, 2024, to 0.27, and then slightly increased to 0.28 by December 31, 2024. Although these levels are lower than the peak in March 2024, they still suggest that Solventum Corp. remains able to cover a significant portion of its short-term liabilities with its cash holdings.
Overall, Solventum Corp.'s cash ratio trend indicates some variability in its liquidity position, with periods of improvement and slight decline. It is important for the company to maintain a sufficient level of cash reserves to ensure it can meet its short-term obligations without significant strain on its finances.
Peer comparison
Dec 31, 2024