Johnson Controls International PLC (JCI)
Quick ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 835,000 | 2,031,000 | 1,336,000 | 1,951,000 | 2,805,000 |
| Short-term investments | US$ in thousands | — | — | 1,066,000 | — | — |
| Receivables | US$ in thousands | 6,077,000 | 5,791,000 | 5,811,000 | 5,599,000 | 6,878,000 |
| Total current liabilities | US$ in thousands | 11,084,000 | 11,239,000 | 9,098,000 | 8,248,000 | 9,070,000 |
| Quick ratio | 0.62 | 0.70 | 0.90 | 0.92 | 1.07 |
September 30, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($835,000K
+ $—K
+ $6,077,000K)
÷ $11,084,000K
= 0.62
The quick ratio, also known as the acid-test ratio, is a measure of a company's short-term liquidity, indicating its ability to meet its short-term obligations using its most liquid assets. The formula for quick ratio is (Current Assets - Inventory) / Current Liabilities.
Analyzing Johnson Controls International plc's quick ratio over the past five years reveals a declining trend. In September 2023, the quick ratio stood at 0.72, a decrease from 0.78 in 2022, 0.87 in 2021, 1.00 in 2020, and 1.16 in 2019. This downward trend suggests a potential deterioration in the company's ability to meet its short-term obligations using its quick assets.
A quick ratio below 1.0 may indicate that the company may have difficulty meeting its short-term obligations. It's important to note that different industries have varying working capital requirements, so comparing the quick ratio to industry peers is essential in assessing its adequacy.
The decreasing quick ratio could signal potential liquidity concerns for Johnson Controls International plc. Further investigation into the composition of its current assets and the nature of its short-term liabilities is warranted to understand the factors driving this trend. Additionally, comparing the company's quick ratio to industry benchmarks and competitors can provide further insights into its liquidity position.
Peer comparison
Sep 30, 2023