Honeywell International Inc (HON)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 7,925,000 | 9,627,000 | 10,959,000 | 14,275,000 | 9,067,000 |
| Short-term investments | US$ in thousands | 170,000 | 483,000 | 564,000 | 945,000 | 1,349,000 |
| Receivables | US$ in thousands | 7,530,000 | 7,440,000 | 6,830,000 | 6,827,000 | 7,493,000 |
| Total current liabilities | US$ in thousands | 18,539,000 | 19,938,000 | 19,508,000 | 19,197,000 | 18,098,000 |
| Quick ratio | 0.84 | 0.88 | 0.94 | 1.15 | 0.99 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($7,925,000K
+ $170,000K
+ $7,530,000K)
÷ $18,539,000K
= 0.84
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio above 1 indicates that a company has enough liquid assets to cover its current liabilities.
Honeywell International Inc's quick ratio has shown a declining trend over the past five years, decreasing from 1.10 in 2019 to 0.93 in 2023. This decreasing trend may raise concerns about the company's ability to meet its short-term obligations using its readily available liquid assets.
While a declining quick ratio may signal a potential liquidity issue, it is important to consider the context in which this ratio is viewed. Factors such as changes in the company's operations, investments, or debt levels could impact the quick ratio.
Overall, Honeywell International Inc's quick ratio of 0.93 as of Dec 31, 2023, indicates that the company may have slightly insufficient liquid assets to cover its short-term liabilities. This suggests the need for continued monitoring of the company's liquidity position to ensure its financial health and ability to meet its obligations in the short term.
Peer comparison
Dec 31, 2023