Viatris Inc (VTRS)

Quick ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cash US$ in thousands 991,900 1,259,900 701,200 844,400 475,600
Short-term investments US$ in thousands 37,000 35,300 38,200 39,100 109,100
Receivables US$ in thousands 2,823,800 3,243,800 3,774,400 3,891,300 2,640,100
Total current liabilities US$ in thousands 7,777,400 6,746,200 9,884,400 10,562,900 5,569,100
Quick ratio 0.50 0.67 0.46 0.45 0.58

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($991,900K + $37,000K + $2,823,800K) ÷ $7,777,400K
= 0.50

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio above 1 indicates that a company has more liquid assets than current liabilities, suggesting a strong ability to cover its short-term debts. Conversely, a quick ratio below 1 signifies that the company may face challenges in meeting its immediate financial obligations.

Analyzing Viatris Inc's quick ratio over the past five years reveals fluctuations in its liquidity position. In 2023, the quick ratio stands at 0.86, below the ideal threshold of 1. This suggests that Viatris may have a limited ability to cover its short-term liabilities with its current liquid assets.

Comparing this to the previous years, Viatris Inc's quick ratio was above 1 in 2022, indicating a stronger liquidity position. However, in 2021, the quick ratio dropped to 0.70, highlighting potential difficulties in meeting short-term obligations. The stability in the quick ratio from 2020 (0.70) to 2019 (0.73) suggests that Viatris Inc has maintained a consistent level of liquidity over these years.

Overall, Viatris Inc's quick ratio trend indicates fluctuations in its ability to cover short-term liabilities with liquid assets, signaling potential variations in its liquidity management over the years. Further analysis of the underlying components of current assets and liabilities may provide deeper insights into Viatris Inc's liquidity position.