Illinois Tool Works Inc (ITW)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,065,000 | 708,000 | 1,527,000 | 2,564,000 | 1,981,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 3,123,000 | 3,171,000 | 2,840,000 | 2,506,000 | 2,461,000 |
| Total current liabilities | US$ in thousands | 4,675,000 | 4,460,000 | 3,470,000 | 2,589,000 | 2,154,000 |
| Quick ratio | 0.90 | 0.87 | 1.26 | 1.96 | 2.06 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,065,000K
+ $—K
+ $3,123,000K)
÷ $4,675,000K
= 0.90
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.
Looking at the historical data for Illinois Tool Works, Inc., we observe the following trends in the quick ratio:
1. In 2023, the quick ratio stands at 0.97, indicating that the company has $0.97 in liquid assets available to cover each $1 of current liabilities. This suggests a slight decline from the previous year.
2. In 2022, the quick ratio was 0.94, which was lower compared to the prior year. This implies that the company's ability to meet its short-term obligations with liquid assets weakened.
3. The quick ratio was 1.35 in 2021, showing an improvement from the previous year. This suggests an increase in the company's liquidity and ability to cover short-term liabilities.
4. In 2020, the quick ratio was 2.06, indicating a significant increase compared to the prior year. This suggests a substantial improvement in the company's liquidity position and ability to satisfy short-term obligations comfortably.
5. The highest quick ratio in the provided data is 2.20 in 2019, indicating that the company had more than enough liquid assets to cover its short-term liabilities, reflecting a robust liquidity position.
Overall, the trend in Illinois Tool Works, Inc.'s quick ratio fluctuated over the years, showing both improvements and declines. Investors and analysts may want to further investigate the underlying reasons for these fluctuations to assess the company's liquidity position and financial health accurately.
Peer comparison
Dec 31, 2023