Fortive Corp (FTV)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 813,300 | 1,888,800 | 709,200 | 819,300 | 1,824,800 |
| Short-term investments | US$ in thousands | — | — | — | 0 | 1,119,200 |
| Total current liabilities | US$ in thousands | 2,238,400 | 1,791,300 | 2,727,100 | 3,714,900 | 2,860,800 |
| Cash ratio | 0.36 | 1.05 | 0.26 | 0.22 | 1.03 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($813,300K
+ $—K)
÷ $2,238,400K
= 0.36
The cash ratio, which measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, for Fortive Corp has fluctuated over the past five years.
As of December 31, 2020, the cash ratio was 1.03, indicating that Fortive had more than enough cash on hand to cover its short-term obligations at that time. However, the ratio decreased significantly to 0.22 by December 31, 2021, suggesting a potential liquidity strain.
Subsequently, there was a slight improvement in the cash ratio to 0.26 by December 31, 2022, but it remained below the comfort level. By December 31, 2023, the ratio rebounded to a healthier level of 1.05, indicating an improvement in the company's liquidity position.
Most recently, as of December 31, 2024, the cash ratio stood at 0.36, showing that Fortive's cash reserves were still not sufficient to comfortably cover its short-term liabilities.
Overall, the varying trend in Fortive Corp's cash ratio over the years highlights fluctuations in the company's liquidity position. Maintaining a healthy cash ratio is crucial for ensuring the company's ability to meet its short-term obligations promptly.
Peer comparison
Dec 31, 2024