Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Illinois Tool Works Inc., liquidity ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.84 | 2.52 | 2.90 | 1.63 | 2.38 | |
| Quick ratio | 1.26 | 1.96 | 2.06 | 1.16 | 1.87 | |
| Cash ratio | 0.44 | 0.99 | 0.92 | 0.42 | 1.01 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
| Liquidity ratio | Description | The company |
|---|---|---|
| Current ratio | A liquidity ratio calculated as current assets divided by current liabilities. | Illinois Tool Works Inc. current ratio deteriorated from 2019 to 2020 and from 2020 to 2021. |
| Quick ratio | A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. | Illinois Tool Works Inc. quick ratio deteriorated from 2019 to 2020 and from 2020 to 2021. |
| Cash ratio | A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. | Illinois Tool Works Inc. cash ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021. |
Current Ratio
Illinois Tool Works Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 6,374) | 6,523) | 6,253) | 5,778) | 7,278) | |
| Current liabilities | 3,470) | 2,589) | 2,154) | 3,542) | 3,053) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 1.84 | 2.52 | 2.90 | 1.63 | 2.38 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Boeing Co. | 1.33 | 1.39 | — | — | — | |
| Caterpillar Inc. | 1.46 | 1.53 | — | — | — | |
| Eaton Corp. plc | 1.04 | 1.56 | 1.70 | — | — | |
| GE Aerospace | 1.28 | 1.58 | — | — | — | |
| Honeywell International Inc. | 1.30 | 1.47 | — | — | — | |
| Lockheed Martin Corp. | 1.42 | 1.39 | — | — | — | |
| RTX Corp. | 1.19 | 1.21 | — | — | — | |
| Current Ratio, Sector | ||||||
| Capital Goods | 1.31 | 1.43 | — | — | — | |
| Current Ratio, Industry | ||||||
| Industrials | 1.29 | 1.41 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Current ratio = Current assets ÷ Current liabilities
= 6,374 ÷ 3,470 = 1.84
2 Click competitor name to see calculations.
| Liquidity ratio | Description | The company |
|---|---|---|
| Current ratio | A liquidity ratio calculated as current assets divided by current liabilities. | Illinois Tool Works Inc. current ratio deteriorated from 2019 to 2020 and from 2020 to 2021. |
Quick Ratio
Illinois Tool Works Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and equivalents | 1,527) | 2,564) | 1,981) | 1,504) | 3,094) | |
| Trade receivables | 2,840) | 2,506) | 2,461) | 2,622) | 2,628) | |
| Total quick assets | 4,367) | 5,070) | 4,442) | 4,126) | 5,722) | |
| Current liabilities | 3,470) | 2,589) | 2,154) | 3,542) | 3,053) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 1.26 | 1.96 | 2.06 | 1.16 | 1.87 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Boeing Co. | 0.34 | 0.41 | — | — | — | |
| Caterpillar Inc. | 0.89 | 1.02 | — | — | — | |
| Eaton Corp. plc | 0.54 | 0.68 | 0.78 | — | — | |
| GE Aerospace | 0.93 | 1.27 | — | — | — | |
| Honeywell International Inc. | 0.94 | 1.15 | — | — | — | |
| Lockheed Martin Corp. | 1.15 | 1.05 | — | — | — | |
| RTX Corp. | 0.81 | 0.78 | — | — | — | |
| Quick Ratio, Sector | ||||||
| Capital Goods | 0.71 | 0.83 | — | — | — | |
| Quick Ratio, Industry | ||||||
| Industrials | 0.80 | 0.88 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 4,367 ÷ 3,470 = 1.26
2 Click competitor name to see calculations.
| Liquidity ratio | Description | The company |
|---|---|---|
| Quick ratio | A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. | Illinois Tool Works Inc. quick ratio deteriorated from 2019 to 2020 and from 2020 to 2021. |
Cash Ratio
Illinois Tool Works Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and equivalents | 1,527) | 2,564) | 1,981) | 1,504) | 3,094) | |
| Total cash assets | 1,527) | 2,564) | 1,981) | 1,504) | 3,094) | |
| Current liabilities | 3,470) | 2,589) | 2,154) | 3,542) | 3,053) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.44 | 0.99 | 0.92 | 0.42 | 1.01 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Boeing Co. | 0.20 | 0.29 | — | — | — | |
| Caterpillar Inc. | 0.31 | 0.36 | — | — | — | |
| Eaton Corp. plc | 0.08 | 0.19 | 0.12 | — | — | |
| GE Aerospace | 0.54 | 0.78 | — | — | — | |
| Honeywell International Inc. | 0.59 | 0.79 | — | — | — | |
| Lockheed Martin Corp. | 0.26 | 0.23 | — | — | — | |
| RTX Corp. | 0.22 | 0.25 | — | — | — | |
| Cash Ratio, Sector | ||||||
| Capital Goods | 0.32 | 0.44 | — | — | — | |
| Cash Ratio, Industry | ||||||
| Industrials | 0.39 | 0.47 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 1,527 ÷ 3,470 = 0.44
2 Click competitor name to see calculations.
| Liquidity ratio | Description | The company |
|---|---|---|
| Cash ratio | A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. | Illinois Tool Works Inc. cash ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021. |