Smith AO Corporation (AOS)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 1,500,300 | 1,633,700 | 1,752,600 | 1,618,000 | 1,500,400 |
| Total current liabilities | US$ in thousands | 945,300 | 934,200 | 1,118,800 | 886,300 | 766,500 |
| Current ratio | 1.59 | 1.75 | 1.57 | 1.83 | 1.96 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $1,500,300K ÷ $945,300K
= 1.59
The current ratio of A.O. Smith Corp. has exhibited fluctuations over the past five years. The ratio, which measures the company's short-term liquidity and ability to meet its current liabilities with its current assets, decreased from 1.96 in 2019 to 1.57 in 2021, reflecting a potential weakening in its liquidity position. However, the ratio improved in 2022 to 1.75 before declining again to 1.59 in 2023.
While a current ratio above 1 typically indicates that the company can cover its short-term obligations, the decreasing trend in A.O. Smith Corp.'s current ratio over the period raises concerns about its ability to meet its current liabilities using its current assets. Further analysis and consideration of other liquidity ratios would be beneficial to assess the company's overall liquidity position in more detail.
Peer comparison
Dec 31, 2023