WW Grainger Inc (GWW)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 5,274,000 | 4,977,000 | 4,011,000 | 3,919,000 | 3,555,000 |
| Total current liabilities | US$ in thousands | 1,831,000 | 2,010,000 | 1,528,000 | 1,441,000 | 1,678,000 |
| Current ratio | 2.88 | 2.48 | 2.62 | 2.72 | 2.12 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $5,274,000K ÷ $1,831,000K
= 2.88
The current ratio of W.W. Grainger Inc. has fluctuated over the past five years, ranging from 2.12 in 2019 to 2.88 in 2023. A current ratio above 1 indicates that the company has more current assets than current liabilities, which is generally positive.
In comparison to the previous years, the current ratio was relatively stable between 2020 and 2022, ranging from 2.62 to 2.72. This suggests that the company had a consistent ability to cover its short-term liabilities with its current assets during that period.
The significant increase in the current ratio to 2.88 in 2023 indicates a stronger liquidity position, which may be a result of increased current assets relative to current liabilities. This could imply improved cash management or more efficient inventory turnover.
Overall, a current ratio of around 2 indicates that W.W. Grainger Inc. has a healthy liquidity position and should be able to meet its short-term obligations comfortably. However, it is important to consider other financial metrics and industry benchmarks for a comprehensive assessment of the company's financial health.