Illinois Tool Works Inc (ITW)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 6,235,000 | 6,270,000 | 6,374,000 | 6,523,000 | 6,253,000 |
| Total current liabilities | US$ in thousands | 4,675,000 | 4,460,000 | 3,470,000 | 2,589,000 | 2,154,000 |
| Current ratio | 1.33 | 1.41 | 1.84 | 2.52 | 2.90 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $6,235,000K ÷ $4,675,000K
= 1.33
The current ratio of Illinois Tool Works, Inc. has exhibited a declining trend over the past five years, from 2.90 in 2019 to 1.33 in 2023. This ratio measures the company's ability to cover its short-term liabilities with its current assets. A current ratio above 1 indicates that the company has more current assets than current liabilities.
The significant decrease in the current ratio may suggest that Illinois Tool Works, Inc. has been facing challenges in maintaining optimal levels of current assets relative to its current liabilities. A current ratio of 1.33 in 2023 indicates that the company may have a lower ability to meet its short-term obligations compared to prior years.
It is important for stakeholders to monitor this trend closely as a declining current ratio could potentially signal liquidity issues or inefficiencies in managing current assets and liabilities. Further analysis of the company's liquidity position, operational efficiency, and overall financial health would be necessary to gain a comprehensive understanding of the factors contributing to the decline in the current ratio.
Peer comparison
Dec 31, 2023