Trane Technologies plc (TT)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,590,100 | 1,095,300 | 1,220,500 | 2,159,200 | 3,289,900 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 3,090,200 | 2,956,800 | 2,780,100 | 2,429,400 | 2,202,100 |
| Total current liabilities | US$ in thousands | 6,068,900 | 6,053,500 | 5,686,800 | 4,752,400 | 4,338,900 |
| Quick ratio | 0.77 | 0.67 | 0.70 | 0.97 | 1.27 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,590,100K
+ $—K
+ $3,090,200K)
÷ $6,068,900K
= 0.77
The quick ratio of Trane Technologies plc has shown a decreasing trend over the years based on the provided data. As of December 31, 2020, the quick ratio stood at 1.27, indicating a strong ability to meet short-term obligations with liquid assets. However, by December 31, 2024, the quick ratio had decreased to 0.77, signaling a potential weakening of the company's short-term liquidity position.
A quick ratio below 1 suggests that Trane Technologies plc may have difficulty meeting its short-term liabilities with its quick assets alone. This downward trend in the quick ratio raises concerns about the company's liquidity management and its ability to cover immediate financial obligations without relying heavily on inventory or other less liquid assets. Further analysis and investigation into the company's liquidity position and management practices would be advisable to better understand the factors contributing to this decreasing trend in the quick ratio.