Johnson Controls International PLC (JCI)
Cash ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 606,000 | 828,000 | 2,031,000 | 1,336,000 | 1,951,000 |
| Short-term investments | US$ in thousands | — | 7,000 | — | 1,066,000 | — |
| Total current liabilities | US$ in thousands | 11,955,000 | 11,084,000 | 11,239,000 | 9,098,000 | 8,248,000 |
| Cash ratio | 0.05 | 0.08 | 0.18 | 0.26 | 0.24 |
September 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($606,000K
+ $—K)
÷ $11,955,000K
= 0.05
The cash ratio of Johnson Controls International PLC has shown a declining trend over the past five years, decreasing from 0.24 in 2020 to 0.05 in 2024. The cash ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents. A lower cash ratio indicates that the company has less liquid assets available to meet its short-term obligations.
The decreasing trend in the cash ratio may raise concerns about the company's liquidity position, as it suggests a potential inability to quickly pay off its current liabilities using its available cash resources. This could indicate a higher reliance on other forms of short-term financing or a less efficient management of cash resources.
It is important for stakeholders to monitor the company's cash management practices and liquidity position closely, as a low cash ratio may indicate a need for improved cash flow management or strategic adjustments to ensure the company's financial health in the future.