Johnson Controls International PLC (JCI)

Liquidity ratios

Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019
Current ratio 0.94 0.96 0.87 0.97 0.97 1.08 1.03 1.02 1.04 0.97 1.00 1.04 1.10 1.11 1.17 1.18 1.22 1.08 1.05 1.17
Quick ratio 0.57 0.59 0.55 0.63 0.62 0.68 0.64 0.63 0.70 0.62 0.65 0.70 0.90 0.88 0.93 0.95 0.92 0.83 0.69 0.81
Cash ratio 0.05 0.07 0.06 0.15 0.08 0.09 0.16 0.13 0.18 0.13 0.15 0.12 0.26 0.27 0.34 0.33 0.24 0.31 0.11 0.22

The liquidity ratios of Johnson Controls International PLC have fluctuated over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown some variability, ranging from a low of 0.87 to a high of 1.22. Generally, a current ratio above 1 is considered healthy, indicating that the company has more current assets than current liabilities. Johnson Controls has mostly maintained current ratios above 1, although there have been instances where it fell below this benchmark.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also exhibited fluctuations over time. The company's quick ratio has varied between 0.55 and 0.95. A quick ratio above 1 is typically seen as favorable, suggesting that the company can meet its short-term obligations without relying on selling inventory. Johnson Controls' quick ratio has often been below 1, indicating that its current assets, excluding inventory, may not fully cover its current liabilities.

The cash ratio, which is the most conservative measure of liquidity as it focuses only on cash and cash equivalents relative to current liabilities, has shown significant variability. Johnson Controls' cash ratio has ranged from a low of 0.05 to a high of 0.34. A cash ratio of 0.2 or higher is considered healthy, suggesting a strong ability to cover short-term obligations with cash on hand. Johnson Controls has demonstrated instances where its cash ratio fell below this threshold, indicating potential challenges in meeting immediate payment requirements solely from cash reserves.

Overall, Johnson Controls International PLC's liquidity ratios suggest that while the company generally maintains a reasonable ability to cover its short-term obligations with current assets, there are periods where its liquidity position may be relatively weaker, particularly when considering quick and cash ratios. Management should closely monitor these ratios to ensure the company's ability to meet its financial commitments in a timely manner.


See also:

Johnson Controls International PLC Liquidity Ratios (Quarterly Data)


Additional liquidity measure

Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019
Cash conversion cycle days 70.71 65.04 71.18 63.18 50.83 73.34 65.65 64.10 58.12 62.03 59.55 58.24 60.60 61.94 61.18 64.74 69.10 70.10 68.39 64.28

The cash conversion cycle for Johnson Controls International PLC has shown some fluctuations over the past few quarters. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory into cash flows from sales.

In the most recent quarter ending September 30, 2024, the cash conversion cycle was 70.71 days, indicating that the company takes approximately 70.71 days to convert its investments in inventory into cash flows from sales. This represented an increase compared to the previous quarter, where the cycle was 65.04 days.

Looking further back, there have been variations in the cash conversion cycle over the past few quarters, with some periods showing longer cycles and others showing shorter cycles. For example, the cycle was at its lowest at 50.83 days in September 2023 and at its highest at 73.34 days in June 2023.

Overall, a longer cash conversion cycle may indicate inefficiencies in inventory management, sales processes, or collection practices, leading to a longer duration for the company to realize cash from its operating activities. Conversely, a shorter cycle indicates a more efficient cash conversion process.

It would be important for Johnson Controls International PLC to analyze the reasons behind these fluctuations in the cash conversion cycle and work towards implementing strategies to optimize their working capital management and improve cash flow efficiency.