Stryker Corporation (SYK)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.95 | 1.58 | 1.63 | 2.20 | 1.93 |
| Quick ratio | 1.11 | 0.86 | 0.87 | 1.33 | 1.14 |
| Cash ratio | 0.59 | 0.39 | 0.31 | 0.66 | 0.60 |
Stryker Corporation's liquidity ratios show a favorable trend over the years, indicating the company's ability to meet its short-term obligations efficiently. The current ratio, which measures the company's ability to pay off its current liabilities with current assets, has increased from 1.93 in 2020 to 1.95 in 2024, peaking at 2.20 in 2021. This suggests that Stryker has a strong liquidity position, with more current assets available to cover short-term obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibits a positive trend. Starting at 1.14 in 2020, the quick ratio improved to 1.11 in 2024, with a peak of 1.33 in 2021. Although there was a slight decrease in 2022 and 2023, the ratio remained above 1, indicating that Stryker can quickly pay off its current liabilities without relying on selling inventory.
Furthermore, the cash ratio, which reflects the company's ability to cover its current liabilities with cash and cash equivalents, shows a fluctuating pattern. Starting at 0.60 in 2020, the ratio increased to 0.66 in 2021, dropped to 0.31 in 2022, and then improved to 0.59 in 2024. While the cash ratio dipped in 2022, it recovered in subsequent years, demonstrating Stryker's ability to maintain a healthy cash position relative to its short-term obligations.
Overall, Stryker Corporation's liquidity ratios indicate a solid financial foundation, with the company having sufficient liquid assets to meet its short-term commitments and weather potential financial challenges.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 202.93 | 230.21 | 207.69 | 194.36 | 253.75 |
Stryker Corporation's cash conversion cycle has shown fluctuating trends over the past five years. The cycle decreased from 253.75 days as of December 31, 2020, to 194.36 days as of December 31, 2021, indicating an improvement in the company's efficiency in converting its investments in inventory and accounts receivable into cash.
However, in the subsequent years, the cash conversion cycle increased to 207.69 days as of December 31, 2022, and further to 230.21 days as of December 31, 2023, suggesting potential challenges in managing working capital effectively during these periods.
The most recent data point, as of December 31, 2024, shows a decrease in the cash conversion cycle to 202.93 days, which may indicate a positive development in Stryker Corporation's cash management practices.
Overall, the company should continue to monitor and optimize its cash conversion cycle to enhance liquidity, minimize financing costs, and improve overall operational efficiency.