Parker-Hannifin Corporation (PH)

Current ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Total current assets	US$ in thousands	6,798,620	6,834,230	12,046,600	5,616,750	5,034,770
Total current liabilities	US$ in thousands	7,313,310	7,735,370	5,859,320	3,096,500	3,148,370
Current ratio		0.93	0.88	2.06	1.81	1.60

June 30, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $6,798,620K ÷ $7,313,310K
= 0.93

The current ratio of Parker-Hannifin Corporation has shown variations over the past five years, ranging from a low of 0.88 in 2023 to a high of 2.06 in 2022. The current ratio measures the company's ability to meet its short-term obligations with its current assets. A current ratio below 1 indicates that the company may have difficulty meeting its short-term liabilities with its current assets alone, which could signal potential liquidity issues.

In the most recent fiscal year, as of June 30, 2024, the current ratio stood at 0.93, implying that the company may face challenges in covering its short-term obligations with its current assets. This decrease from the prior year suggests a potential deterioration in the company's liquidity position. It is important for stakeholders to monitor this trend closely to assess the company's ability to manage its working capital efficiently and meet its financial obligations in the short term.

In contrast, the notably higher current ratios in 2021 and 2022 indicate improved short-term liquidity positions for Parker-Hannifin Corporation during those years. A current ratio above 1 indicates that the company has more than enough current assets to cover its short-term liabilities, providing a buffer for unexpected financial needs.

Overall, the trend in Parker-Hannifin Corporation's current ratio highlights the importance of monitoring liquidity management and working capital efficiency to ensure the company's ability to meet its short-term obligations and sustain its operations effectively.