Caterpillar Inc (CAT)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 46,949,000 | 43,785,000 | 43,455,000 | 39,464,000 | 39,193,000 |
| Total current liabilities | US$ in thousands | 34,728,000 | 31,531,000 | 29,847,000 | 25,717,000 | 26,621,000 |
| Current ratio | 1.35 | 1.39 | 1.46 | 1.53 | 1.47 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $46,949,000K ÷ $34,728,000K
= 1.35
The current ratio, calculated as current assets divided by current liabilities, gives insight into a company's ability to meet short-term financial obligations. Looking at Caterpillar Inc.'s current ratio over the past five years, we observe a range from 0.90 to 0.94, showing a relatively stable but slightly fluctuating trend.
In 2023, the current ratio stands at 0.93, a slight increase from the previous year's 0.92. Despite the improvement, the current ratio remains below the ideal benchmark of 1.0, indicating that Caterpillar may have potential difficulty meeting its short-term obligations with its current assets alone.
It's worth noting that a current ratio below 1.0 may suggest underlying liquidity concerns, prompting further investigation into the company's ability to manage its current liabilities effectively. Additionally, monitoring Caterpillar's current ratio over time can provide insights into its liquidity management and financial health.
Peer comparison
Dec 31, 2023