Trane Technologies plc (TT)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.13 | 1.29 | 1.19 | 1.26 | 1.12 | 1.14 | 1.09 | 1.31 | 1.36 | 1.62 | 1.58 | 1.59 | 1.59 | 1.67 | 1.66 | 1.55 | 1.77 | 1.28 | 1.23 | 1.58 |
| Quick ratio | 0.67 | 0.79 | 0.69 | 0.68 | 0.70 | 0.71 | 0.68 | 0.82 | 0.97 | 1.20 | 1.21 | 1.20 | 1.27 | 1.32 | 1.22 | 1.12 | 0.67 | 0.80 | 0.77 | 1.03 |
| Cash ratio | 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 | 0.25 | 0.17 | 0.17 | 0.42 |
Trane Technologies plc's liquidity ratios provide insight into its ability to meet short-term obligations. The current ratio, which measures the company's ability to pay off current liabilities with current assets, has shown some fluctuations over the past eight quarters, ranging from 1.09 to 1.31. The ratio has generally been above 1, indicating that Trane Technologies plc has had more than enough current assets to cover its current liabilities.
The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, has also displayed variability, ranging from 0.75 to 0.91. This suggests that the company may have had challenges in meeting its short-term obligations without relying on inventory in some quarters.
The cash ratio, the most conservative liquidity measure that focuses solely on cash and cash equivalents to cover current liabilities, has fluctuated between 0.20 and 0.38. This indicates that Trane Technologies plc may have had varying levels of liquid cash to meet its immediate payment obligations.
Overall, while the current ratio generally indicates that Trane Technologies plc has been able to meet its short-term liabilities, the lower quick and cash ratios in certain quarters suggest that the company may need to manage its liquidity more effectively to ensure it can address immediate financial obligations without relying heavily on inventory or non-cash assets.
See also:
Trane Technologies plc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 76.68 | 76.90 | 90.38 | 106.60 | 51.18 | 57.49 | 55.97 | 54.78 | 27.40 | 57.34 | 55.70 | 55.00 | 54.96 | 57.13 | 59.92 | 50.03 | 46.24 | 69.01 | 71.59 | 66.48 |
Trane Technologies plc's cash conversion cycle has shown fluctuations over the past eight quarters. The company's cash conversion cycle peaked at 75.16 days in Q2 2023 and hit its lowest point at 59.10 days in Q1 2022. Overall, there seems to be a general upward trend in the cash conversion cycle over the observed period, indicating potential inefficiencies in the company's working capital management. These fluctuations suggest that Trane Technologies plc may be facing challenges in converting its investments in inventory and receivables into cash efficiently. Further analysis of the underlying reasons for these variations is recommended to optimize the company's cash flow cycle and improve its overall financial performance.