Timken Company (TKR)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 418,900 | 331,600 | 257,100 | 320,300 | 209,500 |
| Short-term investments | US$ in thousands | 31,600 | 39,200 | 56,900 | 37,600 | 25,800 |
| Receivables | US$ in thousands | 671,700 | 699,600 | 626,400 | 581,100 | 545,100 |
| Total current liabilities | US$ in thousands | 1,471,300 | 1,012,400 | 896,600 | 848,000 | 736,600 |
| Quick ratio | 0.76 | 1.06 | 1.05 | 1.11 | 1.06 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($418,900K
+ $31,600K
+ $671,700K)
÷ $1,471,300K
= 0.76
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of less than 1 indicates that a company may have difficulty meeting its short-term liabilities. Looking at Timken Co.'s quick ratio over the past five years, we observe a declining trend from 1.39 in 2019 to 0.96 in 2023. This downward trend suggests that the company's ability to cover its short-term obligations with its most liquid assets has weakened over the years. It is important to further investigate the reasons behind this decrease in the quick ratio to ascertain the company's liquidity position and financial health.
Peer comparison
Dec 31, 2023