Emerson Electric Company (EMR)
Current ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 13,819,000 | 8,506,000 | 8,432,000 | 8,806,000 | 7,139,000 |
| Total current liabilities | US$ in thousands | 5,032,000 | 7,777,000 | 6,246,000 | 5,785,000 | 5,976,000 |
| Current ratio | 2.75 | 1.09 | 1.35 | 1.52 | 1.19 |
September 30, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $13,819,000K ÷ $5,032,000K
= 2.75
The current ratio of Emerson Electric Co. has shown fluctuations over the past five years. The ratio significantly improved from 2019 to 2020, reflecting a stronger ability to meet short-term obligations with current assets. However, there was a substantial decline in 2021, with a current ratio of 1.35, indicating a potential decrease in liquidity and the ability to cover short-term liabilities.
The ratio further declined in 2022 to 1.09, which could be a cause for concern, as it suggests a potential strain on liquidity and the ability to satisfy short-term obligations. However, the most recent data for 2023 shows a significant improvement, with a current ratio of 2.75, which indicates a healthier liquidity position and enhanced capacity to cover short-term liabilities with current assets.
It is essential to consider the nature of Emerson Electric Co.'s current assets and liabilities to fully assess the implications of these fluctuations in the current ratio. Overall, while the current ratio has displayed volatility, the latest year's significant improvement suggests a favorable development in the company's liquidity position.
Peer comparison
Sep 30, 2023