Allegion PLC (ALLE)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 468,100 | 288,000 | 397,900 | 480,400 | 355,300 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 421,700 | 395,600 | 283,300 | 321,800 | 329,800 |
| Total current liabilities | US$ in thousands | 1,079,700 | 703,600 | 601,200 | 521,500 | 507,000 |
| Quick ratio | 0.82 | 0.97 | 1.13 | 1.54 | 1.35 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($468,100K
+ $—K
+ $421,700K)
÷ $1,079,700K
= 0.82
The quick ratio of Allegion plc has shown a declining trend over the past five years. The ratio decreased from 1.44 in 2019 to 0.85 in 2023. This indicates that the company's ability to meet its short-term obligations with its most liquid assets has weakened over the years.
A quick ratio below 1.0 suggests that Allegion plc may have difficulty meeting its short-term liabilities with its liquid assets alone. It is important to note that a quick ratio of 0.85 in 2023 indicates that the company may potentially face liquidity challenges in the short term.
Overall, the decreasing trend in the quick ratio of Allegion plc highlights the need for the company to carefully manage its liquidity position and potentially assess ways to improve its short-term financial health.