Illinois Tool Works Inc (ITW)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	1,065,000	708,000	1,527,000	2,564,000	1,981,000
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	4,675,000	4,460,000	3,470,000	2,589,000	2,154,000
Cash ratio		0.23	0.16	0.44	0.99	0.92

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,065,000K + $—K) ÷ $4,675,000K
= 0.23

The cash ratio of Illinois Tool Works, Inc. has been fluctuating over the past five years, ranging from 0.21 to 1.05. In 2023, the cash ratio is 0.27, indicating that the company has $0.27 in cash and cash equivalents for every $1 of current liabilities. The decrease from the previous year suggests a lower liquidity position compared to 2022 when the ratio was 0.21. However, in 2023, the cash ratio is still higher than the levels seen in 2021, 2020, and 2019, which were 0.50, 1.05, and 0.99, respectively. This implies that in 2023, Illinois Tool Works may have a slightly weaker ability to cover its short-term obligations with its available cash compared to the previous year, but the company has maintained a relatively stable cash position over the years. It is essential for stakeholders to monitor this ratio to assess the company's liquidity and ability to meet its short-term financial obligations.