JNJ Quick Ratio Analysis

The quick ratio measures whether a company can cover its short-term debts with its most liquid assets, like cash and marketable securities, without relying on inventory.

At 0.72x, JNJ has $0.72 of liquid assets for every $1 of current liabilities, meaning it is below the 1.0x threshold often seen as comfortable. This exactly matches the sector median of 0.72x, but JNJ sits at the 0th percentile among its healthcare peers, indicating it has the lowest quick ratio in the comparison set. The year-over-year change is not available, but the quarter-over-quarter change shows a +5.9% improvement, with the metric rising from 0.68x to 0.72x over the most recent two periods. This combination of a level in line with the median but at the bottom of the peer range, alongside a short-term upward trend, suggests limited immediate liquidity stress but leaves no cushion against a sudden cash crunch. The metric does not directly support a cautious verdict, since the improving QoQ trend and sector-median level are not alarming signals. However, the 0th percentile ranking and the absence of a longer trend line mean this metric neither reinforces nor strongly contradicts the overall CAUTIOUS stance.

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