Eaton Corporation PLC (ETN)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 555,000 | 488,000 | 294,000 | 297,000 | 438,000 |
| Short-term investments | US$ in thousands | 1,525,000 | 2,121,000 | 261,000 | 271,000 | 664,000 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 7,857,000 | 7,747,000 | 6,375,000 | 7,212,000 | 5,926,000 |
| Quick ratio | 0.26 | 0.34 | 0.09 | 0.08 | 0.19 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($555,000K
+ $1,525,000K
+ $—K)
÷ $7,857,000K
= 0.26
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated as (Current Assets - Inventory) / Current Liabilities.
In the case of Eaton Corporation PLC, the quick ratio has fluctuated over the past five years.
- As of December 31, 2020, the quick ratio was 0.19, indicating that for every $1 of current liabilities, Eaton had $0.19 of quick assets available to cover these obligations.
- By December 31, 2021, the quick ratio decreased to 0.08, suggesting a significant deterioration in Eaton's liquidity position.
- However, by December 31, 2022, there was a slight improvement with the quick ratio increasing to 0.09, although still at a relatively low level.
- The year 2023 saw a substantial improvement as the quick ratio jumped to 0.34, indicating stronger liquidity and a better ability to fulfill short-term obligations.
- As of December 31, 2024, the quick ratio decreased slightly to 0.26, but it remains higher than the levels observed in the preceding years, reflecting ongoing but improved liquidity.
Overall, Eaton Corporation PLC's quick ratio trend indicates fluctuations in liquidity over the years, with a notable improvement in 2023. It is crucial for investors and stakeholders to monitor these ratios to assess the company's short-term liquidity position.
Peer comparison
Dec 31, 2024