Stryker Corporation (SYK)
Liquidity ratios
| 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 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.95 | 1.91 | 1.68 | 1.71 | 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 |
| Quick ratio | 1.11 | 1.10 | 0.81 | 0.85 | 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 | 1.98 | 1.59 |
| Cash ratio | 0.59 | 0.61 | 0.28 | 0.35 | 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 | 1.48 | 0.95 |
Stryker Corporation's liquidity ratios, as represented by its current ratio, quick ratio, and cash ratio, have shown fluctuations over the past few years.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 1, indicating good liquidity levels. However, there was a significant decline from 2.91 in June 2020 to 1.93 in December 2020, which improved gradually to 2.20 by December 2021. Subsequently, the ratio declined again to 1.58 by December 2023 and recovered slightly to 1.95 by December 2024. Overall, the current ratio has displayed some variability but has mostly been above 1, suggesting the company's ability to meet its short-term obligations.
The quick ratio, a more conservative measure of liquidity as it excludes inventory from current assets, has followed a similar trend. Starting at 1.98 in June 2020, the ratio dropped to 1.14 in December 2020 before recovering and fluctuating between 0.72 and 1.33 until December 2024. The quick ratio has shown some volatility, indicating that the company may face challenges in meeting its immediate liabilities without relying on inventory.
Lastly, the cash ratio, which is the most stringent measure of liquidity focusing solely on cash and cash equivalents, has generally been lower compared to the current and quick ratios. The ratio ranged from 0.22 to 1.53 between March 2020 and September 2020 but then fluctuated between 0.22 and 0.66 until December 2024. The cash ratio's fluctuations suggest that Stryker may have limited cash reserves to cover its short-term obligations without relying on other current assets.
In conclusion, Stryker Corporation has exhibited variable liquidity ratios over the analyzed period, with the current ratio generally above 1, indicating sufficient liquidity to cover short-term obligations. However, the quick and cash ratios show more volatility, suggesting varying levels of ability to meet immediate liabilities without relying on inventory or cash reserves.
See also:
Additional liquidity measure
| 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 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 202.93 | 242.39 | 237.29 | 242.30 | 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 |
The cash conversion cycle of Stryker Corporation provides insight into the efficiency of its working capital management. The trend shows fluctuations over the quarters, indicating changes in the company's ability to convert its investments in inventory and receivables into cash.
From March 31, 2020, to December 31, 2024, Stryker's cash conversion cycle ranged from a high of 260.53 days to a low of 194.36 days. In general, a lower cash conversion cycle suggests that the company is efficiently managing its cash flow and working capital, while a higher cycle may indicate inefficiencies in the collection of receivables or management of inventory.
The trend in Stryker's cash conversion cycle shows some variability, with periods of improvement followed by slight increases. Overall, the trend seems to be moving towards a more efficient cash conversion cycle, potentially indicating enhanced working capital management practices within the company.
Analyzing the cash conversion cycle alongside other financial metrics and industry benchmarks can provide a more comprehensive understanding of Stryker's operational efficiency and financial performance.