Watsco Inc (WSO)
Current ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 3,079,980 | 2,391,930 | 2,298,740 | 1,961,400 | 1,497,020 |
| Total current liabilities | US$ in thousands | 983,901 | 712,012 | 906,522 | 726,722 | 499,715 |
| Current ratio | 3.13 | 3.36 | 2.54 | 2.70 | 3.00 |
December 31, 2024 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $3,079,980K ÷ $983,901K
= 3.13
The current ratio of Watsco Inc has been relatively stable over the past five years, ranging between 2.54 and 3.36. This ratio indicates the company's ability to meet its short-term obligations using its current assets. With a current ratio above 1, Watsco Inc has consistently demonstrated its ability to cover its short-term liabilities with its current assets.
The slight decline in the current ratio from 2021 to 2022 may suggest a decrease in short-term liquidity, potentially due to changes in the company's current asset or current liability composition. However, the ratio improved in 2023 and 2024, indicating a positive trend in the company's liquidity position.
Overall, Watsco Inc appears to maintain a healthy liquidity position, with the current ratio remaining above industry benchmarks of 1.5 to 2. This signifies the company's ability to comfortably meet its short-term financial obligations, which is crucial for financial stability and operational efficiency.