Otis Worldwide Corp (OTIS)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,274,000 | 1,189,000 | 1,565,000 | 1,782,000 |
| Short-term investments | US$ in thousands | — | — | — | — |
| Total current liabilities | US$ in thousands | 6,479,000 | 6,843,000 | 6,247,000 | 6,673,000 |
| Cash ratio | 0.20 | 0.17 | 0.25 | 0.27 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,274,000K
+ $—K)
÷ $6,479,000K
= 0.20
The cash ratio of Otis Worldwide Corp has fluctuated over the past five years, ranging from 0.32 to 0.41. The ratio measures the company's ability to cover its short-term liabilities with its most liquid assets, specifically cash and cash equivalents.
A cash ratio of 0.35 in 2023 indicates that for every dollar of current liabilities, Otis Worldwide Corp has $0.35 in cash available to cover those obligations. This suggests a moderate level of liquidity, where the company may need to rely on other current assets or financing options to meet its short-term obligations.
Comparing the trend over the years, the decreasing trend from 0.41 in 2019 to 0.35 in 2023 may raise concerns about the company's liquidity position, as it indicates a potential decrease in the proportion of cash holdings relative to its current liabilities. It would be important for investors and stakeholders to closely monitor this trend to ensure the company can continue to meet its short-term financial obligations effectively.
Peer comparison
Dec 31, 2023