Carrier Global Corp (CARR)

Liquidity ratios

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio 2.73 1.64 1.72 1.67
Quick ratio 1.81 1.05 0.81 1.45
Cash ratio 1.45 0.58 0.45 0.91

The liquidity ratios of Carrier Global Corp indicate its ability to meet short-term obligations and manage its current liabilities effectively.

The current ratio for Carrier Global Corp has shown improvement over the years, reaching a strong level of 2.73 in 2023 from 1.34 in 2019. This indicates that the company's current assets are 2.73 times higher than its current liabilities, reflecting a healthy liquidity position.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Carrier Global Corp's quick ratio has also improved significantly, reaching 1.92 in 2023 compared to 1.04 in 2019. This demonstrates the company's ability to meet short-term obligations using only its most liquid assets.

The cash ratio, which is the most conservative measure of liquidity, focuses solely on cash and cash equivalents. Carrier Global Corp's cash ratio has shown a notable increase over the years, reaching 1.56 in 2023 from 0.43 in 2019. This indicates that the company has a sufficient amount of cash on hand to cover its current liabilities.

Overall, the increasing trend in all three liquidity ratios reflects Carrier Global Corp's strong liquidity position and its ability to efficiently manage its short-term financial obligations. This indicates a favorable financial health and operational efficiency for the company in addressing its working capital requirements.


See also:

Carrier Global Corp Liquidity Ratios


Additional liquidity measure

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash conversion cycle days -10.49 20.69 2.32 17.96

The cash conversion cycle of Carrier Global Corp has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle improved significantly to 28.79 days from 45.93 days in 2022. This indicates that Carrier Global Corp is managing its working capital more efficiently in the most recent year.

Comparing to the prior years, the trend shows variability in the company's cash conversion cycle. In 2021, the cycle was at 33.47 days, a slight decrease from 49.07 days in 2020, suggesting a positive trend in managing its cash, inventory, and receivables.

Furthermore, in 2019, the cash conversion cycle was 43.26 days, which indicates that the company has successfully reduced this cycle over the years, reflecting improvements in managing its payment and collection processes. Overall, the fluctuation in Carrier Global Corp's cash conversion cycle demonstrates its ongoing efforts to enhance working capital efficiency and optimize cash flow management.