Johnson Controls International PLC (JCI)
Current ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 10,737,000 | 11,685,000 | 9,998,000 | 10,053,000 | 12,393,000 |
| Total current liabilities | US$ in thousands | 11,084,000 | 11,239,000 | 9,098,000 | 8,248,000 | 9,070,000 |
| Current ratio | 0.97 | 1.04 | 1.10 | 1.22 | 1.37 |
September 30, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $10,737,000K ÷ $11,084,000K
= 0.97
The current ratio of Johnson Controls International plc has been declining over the past five years, indicating a potential decrease in the company's ability to meet its short-term obligations. The current ratio, which is calculated by dividing current assets by current liabilities, provides insight into the company's liquidity and ability to cover its short-term debts.
The current ratio has decreased from 1.37 in 2019 to 0.97 in 2023. A current ratio below 1 suggests that the company may have difficulty meeting its short-term obligations with its current assets alone, which could raise concerns for creditors and investors.
The decreasing trend in the current ratio may be attributed to various factors, such as an increase in current liabilities relative to current assets, potentially indicating a growing reliance on short-term financing or a decrease in the efficiency of current asset management.
This declining trend raises the importance of closely monitoring the company's liquidity position and its ability to meet short-term obligations, as a low current ratio may signal financial distress and impact the company's creditworthiness.
In conclusion, the declining current ratio of Johnson Controls International plc over the past five years warrants further analysis of the company's liquidity management, working capital efficiency, and overall financial health.
Peer comparison
Sep 30, 2023