Johnson Controls International PLC (JCI)

Liquidity ratios

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 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 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 1.37 1.41 0.95
Quick ratio 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 1.07 1.06 0.45
Cash ratio 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 0.31 0.40 0.02

The current ratio measures Johnson Controls International plc's ability to cover its short-term liabilities with its current assets. Over the past eight quarters, the current ratio has ranged from 0.97 to 1.08, indicating a relatively stable position in the short term. However, the ratio consistently remains below 1.0, which may indicate potential challenges in meeting short-term obligations with current assets alone.

The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity. Johnson Controls International plc's quick ratio has hovered between 0.72 and 0.80 over the past two years, suggesting a consistent but relatively low ability to meet short-term obligations with its most liquid assets.

The cash ratio, which specifically assesses the company’s ability to cover its current liabilities with its cash and cash equivalents, fell within a narrow range of 0.18 to 0.29 over the same period. This suggests that the company's cash and cash equivalents may not be sufficient to cover its short-term liabilities comfortably.

In summary, Johnson Controls International plc's liquidity ratios indicate a consistent but relatively tight liquidity position, with its ability to cover short-term liabilities relying heavily on current and liquid assets. While the company has maintained stability in these ratios over the past two years, the consistent trend of ratios below industry standards suggests the need for careful management of working capital and cash flow to ensure the company can meet its short-term obligations effectively.

See also:

Johnson Controls International PLC Liquidity Ratios (Quarterly Data)

Additional liquidity measure

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 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 63.18 53.45 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 58.08 46.79 44.54

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. For Johnson Controls International plc, the cash conversion cycle has shown some fluctuations over the past eight quarters, with a range from 42.49 days to 64.67 days.

The trend indicates an increase in the cash conversion cycle in the most recent quarter, reaching 62.54 days, which suggests a lengthening of the time it takes for the company to convert its investments into cash. This may imply a slower turnover of inventory or an elongated collection period for accounts receivable.

Comparing the latest data to the previous quarters, the increase in the cash conversion cycle could potentially indicate less efficiency in managing working capital, which may lead to higher financing costs and reduced liquidity. Further analysis of the company's inventory management and accounts receivable collection processes would be beneficial to understand the underlying reasons for the fluctuation in the cash conversion cycle.