Trane Technologies plc (TT)
Quick 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 | 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 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Receivables | US$ in thousands | 3,090,200 | 3,393,400 | 3,433,300 | 2,939,800 | 2,956,800 | 3,142,500 | 3,199,800 | 2,606,000 | 2,780,100 | 2,867,400 | 2,758,200 | 2,429,800 | 2,429,400 | 2,432,300 | 2,532,100 | 2,159,400 | 2,202,100 | 2,312,600 | 2,316,400 | 2,091,800 |
| 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 |
| Quick ratio | 0.77 | 0.80 | 0.72 | 0.62 | 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 |
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, a measure of its ability to meet short-term obligations with its most liquid assets, has exhibited fluctuations over the past few years.
Starting from March 31, 2020, the quick ratio stood at 1.12, showing a fairly healthy liquidity position. Over the next quarters, the ratio increased steadily, reaching a peak of 1.32 on September 30, 2020. This indicated an improving ability to cover current liabilities with quick assets such as cash and accounts receivable.
However, from December 31, 2021, the quick ratio began to decline. By March 31, 2022, it had dropped to 0.82, signaling a potential strain in meeting short-term obligations. This decline continued through the following quarters, reaching a low point of 0.62 on March 31, 2024.
Although there was a slight uptick in the quick ratio by June 30, 2024, to 0.72, it remained below the levels seen in the earlier periods. This downward trend could be a cause for concern as it might indicate increasing difficulty for Trane Technologies plc in meeting its short-term obligations with its readily available assets.
Overall, the analysis of the quick ratio suggests that Trane Technologies plc has experienced fluctuations in its liquidity position, with a downward trend in recent periods, highlighting the importance of closely monitoring and managing its short-term liquidity risks.