Raytheon Technologies Corp (RTX)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.99 | 1.04 | 1.09 | 1.19 | 1.21 |
| Quick ratio | 0.34 | 0.39 | 0.41 | 0.52 | 0.53 |
| Cash ratio | 0.12 | 0.16 | 0.18 | 0.25 | 0.27 |
Based on the provided data, Raytheon Technologies Corp's liquidity ratios show a gradual decline over the years.
The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has slightly decreased from 1.21 in 2020 to 0.99 in 2024. This indicates that the company may be facing challenges in meeting its short-term liabilities with current assets.
Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also decreased from 0.53 in 2020 to 0.34 in 2024. This suggests that Raytheon Technologies may have less ability to quickly cover its short-term obligations without relying on inventory.
The cash ratio, representing the company's ability to pay off its current liabilities with its cash and cash equivalents, has shown a noticeable decrease from 0.27 in 2020 to 0.12 in 2024. This downward trend signifies a decreasing ability to settle immediate obligations with readily available cash reserves.
Overall, the declining trend in Raytheon Technologies Corp's liquidity ratios highlights a potential liquidity strain, indicating a need for the company to carefully manage its short-term financial obligations and ensure adequate cash flow to meet its upcoming liabilities.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 42.36 | 121.81 | 95.48 | 81.35 | 65.55 |
The cash conversion cycle of Raytheon Technologies Corp has shown fluctuations over the past five years.
As of December 31, 2020, the company's cash conversion cycle was 65.55 days, indicating that it took approximately 65.55 days to convert its investments in inventory and accounts receivable into cash.
By December 31, 2021, the cash conversion cycle increased to 81.35 days, suggesting a longer period to convert investments into cash compared to the previous year.
In the following years, Raytheon Technologies Corp experienced a further increase in its cash conversion cycle, reaching 95.48 days by December 31, 2022, and significantly rising to 121.81 days by December 31, 2023.
However, there was a notable improvement by December 31, 2024, with the cash conversion cycle decreasing to 42.36 days, indicating a positive trend towards converting investments into cash more efficiently.
Overall, the fluctuation in Raytheon Technologies Corp's cash conversion cycle over the past five years suggests varying effectiveness in managing its working capital and operational efficiency in converting investments into cash.