Eaton Corporation PLC (ETN)
Cash ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 488,000 | 348,000 | 353,000 | 235,000 | 294,000 | 231,000 | 364,000 | 237,000 | 297,000 | 271,000 | 279,000 | 354,000 | 438,000 | 429,000 | 292,000 | 239,000 | 370,000 | 549,000 | 412,000 | 303,000 |
| Short-term investments | US$ in thousands | 2,121,000 | 1,558,000 | 977,000 | 289,000 | 261,000 | 287,000 | 259,000 | 268,000 | 271,000 | 389,000 | 261,000 | 945,000 | 664,000 | 334,000 | 204,000 | 178,000 | 221,000 | 281,000 | 385,000 | 143,000 |
| Total current liabilities | US$ in thousands | 7,747,000 | 7,563,000 | 6,725,000 | 6,087,000 | 6,360,000 | 6,653,000 | 8,974,000 | 8,256,000 | 7,212,000 | 5,914,000 | 8,906,000 | 6,581,000 | 5,881,000 | 5,805,000 | 5,489,000 | 4,944,000 | 5,132,000 | 4,661,000 | 4,450,000 | 5,286,000 |
| Cash ratio | 0.34 | 0.25 | 0.20 | 0.09 | 0.09 | 0.08 | 0.07 | 0.06 | 0.08 | 0.11 | 0.06 | 0.20 | 0.19 | 0.13 | 0.09 | 0.08 | 0.12 | 0.18 | 0.18 | 0.08 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($488,000K
+ $2,121,000K)
÷ $7,747,000K
= 0.34
The cash ratio of Eaton Corporation plc has shown a gradual improvement over the last eight quarters, indicating the company's ability to cover its short-term liabilities with its available cash and cash equivalents. The trend illustrates a strengthening liquidity position as the ratio has increased from 0.15 in Q1 2022 to 0.45 in Q4 2023.
The cash ratio exceeded 0.3 from Q2 2023 onwards, reaching the highest level in Q4 2023 at 0.45. This signifies that Eaton Corporation plc had 45 cents in cash and cash equivalents for every dollar of current liabilities at the end of Q4 2023, a substantial improvement compared to prior periods.
The consistent upward trend in the cash ratio suggests that Eaton Corporation plc has been effectively managing its cash resources and maintaining a healthy liquidity position. This may indicate a decreased risk of financial distress or difficulties in meeting short-term obligations.
Overall, the increasing trend in the cash ratio reflects positively on Eaton Corporation plc's liquidity management and ability to navigate potential financial challenges in the short term.
Peer comparison
Dec 31, 2023