Textron Inc (TXT)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 3,974,000 | 5,513,000 | 3,663,000 | 5,659,000 | 4,245,000 |
| Total current liabilities | US$ in thousands | 4,378,000 | 3,670,000 | 3,136,000 | 3,270,000 | 48,000 |
| Current ratio | 0.91 | 1.50 | 1.17 | 1.73 | 88.44 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $3,974,000K ÷ $4,378,000K
= 0.91
The current ratio of Textron Inc has fluctuated over the past five years, ranging from as low as 0.91 to as high as 88.44. A current ratio below 1 indicates that the company may have difficulties meeting its short-term liabilities with its current assets alone. This was the case in 2023, where the current ratio was 0.91, suggesting potential liquidity concerns.
In 2019, Textron Inc had an unusually high current ratio of 88.44, which may be attributed to factors such as a significant increase in current assets or a decrease in current liabilities. This extremely high ratio may not accurately reflect the company's liquidity position and could indicate inefficiencies in managing working capital.
The current ratio improved in 2020 and 2021, reaching 1.73 and 1.17 respectively. A ratio above 1 indicates that the company has more current assets than current liabilities, which is generally considered a positive sign of liquidity. However, a higher current ratio does not always imply better liquidity if it is due to excessive levels of idle current assets.
In 2022, Textron Inc's current ratio was at its highest in the given period at 1.50, showing a relatively healthy balance between current assets and current liabilities. This ratio suggests that the company had a reasonable amount of assets to cover its short-term obligations.
Overall, while the current ratio of Textron Inc has shown fluctuations over the years, it is essential to assess the underlying reasons for these changes to determine the company's true liquidity position and financial health.
Peer comparison
Dec 31, 2023