Honeywell International Inc (HON)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.31 1.44 1.21 1.66 1.27 1.35 1.41 1.26 1.25 1.24 1.20 1.21 1.30 1.29 1.41 1.43 1.47 1.64 1.63 1.30
Quick ratio 0.52 0.56 0.47 0.73 0.44 0.46 0.51 0.40 0.51 0.44 0.43 0.49 0.59 0.60 0.68 0.71 0.79 0.87 0.87 0.51
Cash ratio 0.52 0.56 0.47 0.73 0.44 0.46 0.51 0.40 0.51 0.44 0.43 0.49 0.59 0.60 0.68 0.71 0.79 0.87 0.87 0.51

Honeywell International Inc's liquidity ratios show a relatively healthy liquidity position over the analyzed periods. The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has generally remained above 1, indicating that the company has sufficient current assets to meet its current liabilities. There was a slight fluctuation in the current ratio throughout the periods but it generally stayed within a reasonable range.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also reflects a stable liquidity position for Honeywell International Inc. Although the quick ratio is lower than the current ratio, it remained above 0.5 for most of the periods, implying that the company can comfortably cover its short-term obligations without relying on selling inventory.

The cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, also demonstrates a consistent liquidity stance. The cash ratio stayed relatively stable throughout the periods, hovering around 0.5, indicating that Honeywell International Inc holds sufficient liquid resources to meet its short-term obligations purely with cash on hand.

Overall, based on the current, quick, and cash ratios, it can be concluded that Honeywell International Inc has maintained a sound liquidity position, having adequate resources to meet its short-term financial obligations over the analyzed periods.

See also:

Honeywell International Inc Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 98.96 100.25 101.39 102.23 100.10 95.56 92.55 89.15 84.84 84.95 86.97 85.50 80.16 77.36 74.72 75.26 73.91 76.25 74.86 69.73

The cash conversion cycle of Honeywell International Inc has shown a gradual increase over the years. As of December 31, 2024, the cash conversion cycle stands at 98.96 days. This indicates that it takes the company approximately 98.96 days to convert its investments in inventory and accounts receivable into cash received from sales.

The trend over the past few years shows a general upwards trajectory, suggesting potential inefficiencies in managing working capital. An increasing cash conversion cycle can indicate challenges in inventory management, collection of accounts receivable, or delays in paying accounts payable.

It is essential for Honeywell International Inc to focus on optimizing its cash conversion cycle to improve cash flow efficiency and ensure liquidity. This can be achieved through better inventory management, enhancing the accounts receivable collection process, and negotiating favorable payment terms with suppliers. Keeping the cash conversion cycle at an optimal level is crucial for maintaining financial health and sustainable operations.