Watsco Inc (WSO)

Current ratio

		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
Total current assets	US$ in thousands	2,391,930	2,730,570	2,882,570	2,597,820	2,298,740	2,409,880	2,623,930	2,320,130	1,961,400	1,980,860	2,022,060	1,695,360	1,484,440	1,644,120	1,631,470	1,590,380	1,546,730	1,690,830	1,695,090	1,490,380
Total current liabilities	US$ in thousands	712,012	887,628	955,999	953,083	906,522	939,522	1,061,340	836,839	726,722	796,693	815,264	630,820	487,145	609,498	638,858	520,474	461,717	542,288	580,518	469,773
Current ratio		3.36	3.08	3.02	2.73	2.54	2.57	2.47	2.77	2.70	2.49	2.48	2.69	3.05	2.70	2.55	3.06	3.35	3.12	2.92	3.17

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $2,391,930K ÷ $712,012K
= 3.36

The current ratio is a liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets. A higher current ratio indicates a stronger liquidity position.

Watsco Inc.'s current ratio has been consistently improving over the quarters, reaching 3.36 in Q4 2023 from 2.54 in Q4 2022. This demonstrates that the company has been able to enhance its ability to meet its short-term liabilities with its current assets.

The current ratio exceeding 1 suggests that Watsco Inc. has more than enough current assets to cover its current liabilities, indicating good liquidity and financial health. Furthermore, the increasing trend in the current ratio implies that the company's liquidity position has been strengthening over time.

Overall, Watsco Inc.'s current ratio trend reflects a positive liquidity situation, which can provide the company with flexibility in meeting its short-term financial obligations.