The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Covidien's current ratio for the quarter that ended in Dec. 2014 was 1.92.
Covidien has a current ratio of 1.92. It generally indicates good short-term financial strength.
The historical rank and industry rank for Covidien's Current Ratio or its related term are showing as below:
FRA:6COP'
s Current Ratio Range Over the Past 10 Years
Min: 0.89 Med: 2.41 Max: 2.85
Current: 1.92
During the past 13 years, Covidien's highest Current Ratio was 2.85. The lowest was 0.89. And the median was 2.41.
FRA:6COP's Current Ratio is not ranked
in the Medical Devices & Instruments industry.
Industry Median: 2.725
vs FRA:6COP: 1.92
Covidien Current Ratio Historical Data
The historical data trend for Covidien's Current Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Covidien's Current Ratio
For the Medical Instruments & Supplies subindustry, Covidien's Current Ratio, along with its competitors' market caps and Current Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Covidien's Current Ratio Distribution in the Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, Covidien's Current Ratio distribution charts can be found below:
* The bar in red indicates where Covidien's Current Ratio falls into.
Covidien Current Ratio Calculation
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
Covidien's Current Ratio for the fiscal year that ended in Sep. 2014 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Covidien (FRA:6COP) Current Ratio Explanation
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Covidien Current Ratio Related Terms
Thank you for viewing the detailed overview of Covidien's Current Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Covidien PLC formerly known as Covidien Ltd. was incorporated in Bermuda in 2000 as a wholly-owned subsidiary of Tyco International Ltd. In June 2009, Covidien plc announced that one of its subsidiaries has completed the acquisition of VNUS Medical Technologies, Inc. In September 2009, the Company completed the acquisition of Power Medical Interventions Inc. In November 2009, the Company completed the acquisition of Aspect Medical Systems Inc. The Company is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings. Its products are found in almost every hospital in the United States. Its mission is to create and deliver innovative healthcare solutions, developed in ethical collaboration with medical professionals. It operates through two segments: Medical Devices and Medical Supplies. The Medical Devices segment includes the development, manufacture and sale of endomechanical instruments, energy devices, soft tissue repair products, vascular products, oximetry and monitoring products, airway and ventilation products, and other medical products. The Medical Supplies segment includes the development, manufacture and sale of nursing care products, medical surgical products, SharpSafety products and original equipment manufacturer products. Competitors of Medical Devices segment include diversified healthcare companies, such as Johnson & Johnson, Boston Scientific, Baxter and C.R. Bard. Its Nursing Care products include: Curity and Kerlix and Medical Surgical products include: Medi-Trace. The Company holds more than 13,000 patents and have over 10,500 patent applications pending in the United States and in certain other countries that relate to aspects of the technology used in many of its products. The Company is subject to numerous federal, state and local environmental protection and health and safety laws and regulations both within and outside the United States.
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