Timken Company (TKR)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 2,634,900 | 2,504,000 | 2,213,500 | 2,000,300 | 1,874,600 |
| Total current liabilities | US$ in thousands | 1,471,300 | 1,012,400 | 896,600 | 848,000 | 736,600 |
| Current ratio | 1.79 | 2.47 | 2.47 | 2.36 | 2.54 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $2,634,900K ÷ $1,471,300K
= 1.79
The current ratio of Timken Co. has shown a decline over the past five years, decreasing from 2.54 in 2019 to 1.79 in 2023. This indicates that the company's current assets may have become less sufficient in covering its current liabilities over time.
A current ratio below 2.0 may suggest that the company could potentially face liquidity issues in meeting its short-term obligations. However, it is important to note that a current ratio of 1.79 is still above the 1.0 threshold, which generally implies that the company has enough current assets to cover its current liabilities.
Further analysis would be needed to determine the underlying reasons for the decline in the current ratio and whether it poses a significant risk to the company's financial health. It would be advisable for investors and stakeholders to monitor the trend of the current ratio and to consider other financial metrics in conjunction with it to gain a better understanding of Timken Co.'s overall financial performance.
Peer comparison
Dec 31, 2023