Trane Technologies plc (TT)
Cash ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,590,100 | 1,470,000 | 874,600 | 849,900 | 1,095,300 | 960,000 | 663,600 | 692,900 | 1,220,500 | 1,080,200 | 1,090,200 | 1,348,400 | 2,159,200 | 2,738,800 | 2,912,400 | 2,838,000 | 3,289,900 | 3,190,100 | 2,366,800 | 2,647,700 |
| Short-term investments | US$ in thousands | — | 457,600 | 451,200 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 6,068,900 | 6,628,900 | 6,592,400 | 6,101,900 | 6,053,500 | 5,214,200 | 5,593,200 | 4,831,400 | 5,686,800 | 5,545,500 | 5,630,300 | 4,594,400 | 4,752,400 | 4,313,500 | 4,512,900 | 4,174,600 | 4,338,900 | 4,170,100 | 3,829,200 | 4,240,800 |
| Cash ratio | 0.26 | 0.29 | 0.20 | 0.14 | 0.18 | 0.18 | 0.12 | 0.14 | 0.21 | 0.19 | 0.19 | 0.29 | 0.45 | 0.63 | 0.65 | 0.68 | 0.76 | 0.76 | 0.62 | 0.62 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,590,100K
+ $—K)
÷ $6,068,900K
= 0.26
The cash ratio of Trane Technologies plc has displayed fluctuations over the reporting periods provided. The cash ratio measures a company's ability to cover its current liabilities using only its cash and cash equivalents.
From March 31, 2020, to June 30, 2021, the cash ratio remained relatively stable between 0.62 and 0.68, indicating a consistent ability to cover short-term liabilities with available cash. However, there was a noticeable decline in the ratio to 0.45 by December 31, 2021, suggesting a decreased capacity to meet short-term obligations solely through cash reserves.
The trend continued with fluctuations in the following periods, with the ratio decreasing to as low as 0.12 by June 30, 2023, which could potentially indicate liquidity challenges for the company. However, there was a slight improvement by December 31, 2024, with the cash ratio reaching 0.26.
Overall, the decreasing trend in the cash ratio over the periods raises concerns about Trane Technologies plc's ability to cover its short-term liabilities with its cash resources alone. Management may need to closely monitor liquidity levels and potentially explore strategies to strengthen the company's cash position to ensure it can meet its financial obligations effectively going forward.