Trane Technologies plc (TT)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 6,869,900 | 6,379,200 | 6,470,900 | 6,905,600 | 9,293,800 |
| Total current liabilities | US$ in thousands | 6,053,500 | 5,686,800 | 4,752,400 | 4,338,900 | 5,238,600 |
| Current ratio | 1.13 | 1.12 | 1.36 | 1.59 | 1.77 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $6,869,900K ÷ $6,053,500K
= 1.13
The current ratio of Trane Technologies plc has shown a fluctuating trend over the past five years, ranging from a low of 1.12 in 2022 to a high of 1.59 in 2020. The current ratio indicates the company's ability to meet its short-term financial obligations with its current assets.
A current ratio above 1 suggests that Trane Technologies plc has more current assets than current liabilities, which is generally considered favorable. However, the decreasing trend in the current ratio from 2020 to 2023 may raise some concerns about the company's liquidity position.
The current ratio of 1.13 in 2023 indicates that Trane Technologies plc may have slightly inadequate current assets to cover its short-term liabilities. This could potentially be a red flag for investors and creditors as it might indicate possible liquidity issues or difficulties in managing short-term obligations.
Overall, while the current ratio of Trane Technologies plc has fluctuated over the years, the downward trend in recent years warrants further investigation into the company's liquidity management and financial health.