Eaton Corporation PLC (ETN)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 488,000 | 294,000 | 297,000 | 438,000 | 370,000 |
| Short-term investments | US$ in thousands | 2,121,000 | 261,000 | 271,000 | 664,000 | 221,000 |
| Receivables | US$ in thousands | 4,475,000 | 4,076,000 | 3,297,000 | 2,904,000 | 3,437,000 |
| Total current liabilities | US$ in thousands | 7,747,000 | 6,360,000 | 7,212,000 | 5,881,000 | 5,132,000 |
| Quick ratio | 0.91 | 0.73 | 0.54 | 0.68 | 0.78 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($488,000K
+ $2,121,000K
+ $4,475,000K)
÷ $7,747,000K
= 0.91
The quick ratio of Eaton Corporation plc has shown some volatility over the past five years, ranging from a low of 0.63 in 2021 to a high of 1.02 in 2023. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio above 1 indicates that the company has an adequate level of liquid assets to cover its short-term liabilities.
In 2023, the quick ratio of Eaton Corporation plc improved to 1.02, suggesting a strengthened ability to meet its short-term obligations without relying heavily on selling inventory. This could indicate efficient management of working capital and liquidity.
However, in 2021, the quick ratio decreased to 0.63, raising some concerns about the company's liquidity position and ability to meet its short-term obligations. A quick ratio below 1 may indicate potential liquidity issues and the need to closely monitor the company's cash flow and working capital management.
Overall, the trend in Eaton Corporation plc's quick ratio over the past five years highlights fluctuations in liquidity levels, indicating the importance of maintaining a balance between liquid assets and short-term liabilities to ensure financial stability.
Peer comparison
Dec 31, 2023