Stryker Corporation (SYK)

Liquidity ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 1.58 1.48 1.54 1.73 1.63 2.04 2.00 1.98 2.20 2.13 2.12 2.27 1.93 2.89 2.91 2.58 2.51 2.18 2.07 2.12
Quick ratio 0.86 0.70 0.72 0.85 0.87 1.01 0.97 1.03 1.33 1.23 1.19 1.25 1.14 2.04 2.00 1.61 1.66 1.14 1.08 1.09
Cash ratio 0.39 0.26 0.22 0.30 0.31 0.33 0.26 0.35 0.66 0.59 0.55 0.58 0.60 1.53 1.50 0.97 1.01 0.52 0.47 0.47

Stryker Corp.'s liquidity ratios indicate its ability to meet short-term obligations efficiently. The current ratio, which measures the company's ability to cover its short-term liabilities with current assets, ranged from 1.48 to 1.73 over the past eight quarters, with an average of approximately 1.67. This implies that Stryker generally had more than enough current assets to cover its short-term obligations during the period.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, ranged from 0.83 to 0.99, with an average of around 0.96. This indicates that Stryker may have faced some challenges in meeting its short-term obligations without relying on inventory sales during certain quarters.

The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, ranged from 0.35 to 0.49, with an average of approximately 0.44. This suggests that Stryker had varying levels of cash to cover its immediate liabilities over the period, with a general trend towards improvement.

Overall, while Stryker Corp. generally maintained healthy liquidity levels over the past two years as indicated by the current ratio, there were some fluctuations in the quick and cash ratios, indicating potential challenges in quickly meeting short-term obligations without relying on inventory or other current assets. This analysis suggests that Stryker may benefit from further monitoring and management of its liquidity position to ensure continued financial stability.

See also:

Stryker Corporation Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 230.21 239.63 225.88 214.62 207.69 211.64 213.19 205.49 194.36 213.04 222.88 245.09 253.75 260.53 255.78 248.27 233.11 247.96 253.04 246.31

The cash conversion cycle of Stryker Corp. has shown some fluctuations over the past eight quarters. The company's cash conversion cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

In Q4 2023, the cash conversion cycle of Stryker Corp. was 230.21 days, indicating that on average, it takes the company approximately 230 days to convert its investments in inventory into cash received from sales. This was a decrease compared to the previous quarter, suggesting an improvement in the company's efficiency in managing its working capital.

Over the past two years, the cash conversion cycle has ranged from a low of 205.49 days in Q1 2022 to a high of 239.63 days in Q3 2023. The overall trend seems to show some variability but remains relatively stable around the 200 to 230 days range.

A lower cash conversion cycle implies quicker conversion of investments into cash, indicating better liquidity and operational efficiency. In contrast, a higher cash conversion cycle may reflect potential issues with inventory management, payment collection, or other operational inefficiencies.

It is important for Stryker Corp. to monitor and manage its cash conversion cycle effectively to optimize its working capital management and ensure a healthy cash flow position. Regular monitoring and analysis of this metric can help the company identify areas for improvement and enhance overall financial performance.