Carrier Global Corp (CARR)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.25 | 2.80 | 1.64 | 1.72 | 1.67 |
| Quick ratio | 0.84 | 1.73 | 1.05 | 0.81 | 1.45 |
| Cash ratio | 0.50 | 1.43 | 0.58 | 0.45 | 0.91 |
Carrier Global Corp's liquidity ratios reveal the company's ability to meet its short-term obligations.
1. Current Ratio:
- The current ratio has shown a fluctuating trend over the years, ranging from 1.25 to 2.80.
- The ratio increased notably in 2023, indicating an improvement in the company's ability to cover its current liabilities with current assets.
- However, the ratio dropped in 2024 to 1.25, which may suggest some challenges in meeting short-term obligations compared to the previous year.
2. Quick Ratio:
- The quick ratio has also displayed variability, with values ranging from 0.81 to 1.73.
- A substantial increase was observed in the quick ratio in 2023, indicating a significant improvement in the company's ability to meet its immediate liabilities without relying on inventory.
- Nonetheless, the quick ratio decreased in 2024 to 0.84, possibly signaling a reduced ability to cover current obligations without relying on inventory assets.
3. Cash Ratio:
- The cash ratio fluctuated between 0.45 and 1.43, showing some inconsistency in the company's cash position.
- A remarkable increase was seen in the cash ratio in 2023, suggesting a substantial improvement in the company's ability to cover current liabilities with cash holdings.
- However, in 2024, the cash ratio dropped to 0.50, which may signal a decrease in the company's ability to pay off short-term obligations solely with cash.
Overall, while the liquidity ratios of Carrier Global Corp indicate some improvements in specific years, there are also fluctuations that suggest the company may have faced challenges in maintaining consistent liquidity levels over the years. Management may need to focus on efficiently managing current assets to ensure the company can meet its short-term financial obligations effectively.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 39.46 | -30.86 | 20.69 | 2.32 | 17.96 |
The cash conversion cycle of Carrier Global Corp has fluctuated over the years. In 2020, the cycle was 17.96 days before significantly improving to 2.32 days in 2021, indicating a more efficient management of working capital. However, in 2022, the cycle increased to 20.69 days, suggesting a possible delay in converting inventory and receivables into cash.
Interestingly, in 2023, the cash conversion cycle turned negative (-30.86 days), which could imply that Carrier Global Corp was able to collect cash from customers before paying suppliers or replenishing inventory. This negative cycle may indicate strong liquidity and efficient operations.
By 2024, the cycle increased significantly to 39.46 days, signifying a potential delay in cash conversion compared to the previous year. Overall, Carrier Global Corp should monitor its cash conversion cycle closely to manage working capital effectively and optimize cash flow operations.