Honeywell International Inc. (NASDAQ:HON)

Current Ratio Trend Analysis

The current ratio exhibits moderate fluctuations over the observed periods. Initially, it declined from 1.43 to a low of 1.20 in mid-2022, indicating a slight reduction in short-term liquidity. Subsequently, there was a recovery trend, peaking at 1.66 in early 2024, which signifies an improvement in the company’s ability to cover short-term liabilities with current assets. However, after this peak, the ratio declined again, stabilizing around a range of 1.25 to 1.36 in the last few quarters. Overall, the current ratio demonstrates variability but remains above 1.0, suggesting the company consistently maintains adequate current asset coverage for its current liabilities.

Quick Ratio Trend Analysis

The quick ratio shows a more pronounced dipping pattern compared to the current ratio. Starting at 1.08, it declined steadily to a trough of approximately 0.82 during mid-2022, indicating a reduced buffer of liquid assets (excluding inventory) relative to short-term obligations. There is a notable rebound in the first quarter of 2024 to 1.18, reflecting strengthened liquidity without relying on inventory. Following this peak, the quick ratio again decreased, fluctuating narrowly between 0.83 and 0.98 through 2025. This volatility suggests cautious liquidity management, with some periods of constrained liquid assets.

Cash Ratio Trend Analysis

The cash ratio follows a declining trend from 0.71 to a low near 0.43 in mid-2022, indicating a reduction in the most liquid assets (cash and cash equivalents) relative to current liabilities. A temporary recovery to 0.73 in early 2024 represents a short-lived strengthening of immediate liquidity. Post this peak, the cash ratio resumes a lower range around 0.46 to 0.59, which remains below the levels seen at the start of the observed timeline. The persistent lower cash ratio suggests a cautious approach to holding highly liquid assets or a shift towards other current assets in managing short-term liquidity.

Overall Liquidity Insights

The three ratios collectively indicate that while the company maintains overall liquidity sufficient to meet short-term obligations, there is variability in the composition and level of liquid assets. The current ratio remains relatively stable and above 1.0, suggesting that total current assets consistently cover current liabilities. However, the lower and more volatile quick and cash ratios imply that the company’s most liquid assets experience fluctuations, potentially influenced by operational needs or strategic cash management. The peak in early 2024 across all ratios may correspond to a period of improved liquidity management or temporary asset accumulation.

The quarterly financial data reveals a fluctuating pattern in both current assets and current liabilities over the observed periods.

Current Assets

Current assets began at approximately $25.6 billion in the first quarter of 2021 and showed modest declines through 2022, reaching a low point near $22.5 billion in September 2022. Following this period, a general upward trend is observed, with some volatility, culminating in a peak around $30.7 billion by the first quarter of 2025. This increase in current assets towards the end of the interval indicates improved liquidity or asset accumulation.

Current Liabilities

Current liabilities started near $17.95 billion in early 2021, rising steadily to about $20 billion by mid-2021. After fluctuating during 2022, liabilities initially decreased towards the end of 2022 but then resumed an upward trajectory, peaking at approximately $22.6 billion by March 2025. The rise in current liabilities suggests increasing short-term obligations over time.

Current Ratio

The current ratio began at 1.43 in March 2021, experienced a gradual decline to around 1.20 by mid-2022, reflecting a narrowing margin between current assets and liabilities. Subsequently, the ratio fluctuated moderately, with a notable spike to 1.66 in the first quarter of 2024, implying a temporary enhancement in liquidity. However, following this peak, the ratio declined again, stabilizing near 1.25 to 1.36 through early 2025. Overall, the current ratio depicts variable liquidity conditions, with occasional strengthening periods.

In summary, the data indicates that while current assets have shown a general upward trend with intermittent declines, current liabilities have steadily increased. The current ratio's fluctuations correspond to these movements, signaling periods of both improved and constrained short-term financial flexibility throughout the examined timeframe.

The analysis of the quarterly financial data reveals fluctuating liquidity conditions over the observed periods. The total quick assets and current liabilities exhibit varied trends, impacting the company's quick ratio.

Total Quick Assets

The total quick assets demonstrated a general decline from early 2021 through late 2022, decreasing from approximately $19.3 billion to about $15.3 billion at its lowest point. Thereafter, a recovery trend is observed starting in early 2023, with values increasing fluctuantly and reaching a peak near $22.3 billion by the third quarter of 2025. This suggests an improvement in liquid asset holdings in recent periods.

Current Liabilities

Current liabilities showed an overall increasing trend with periodic fluctuations. Initial values around $17.9 billion in early 2021 rose steadily to approximately $21.9 billion by the third quarter of 2025. Notable spikes occurred in mid-2024 and late 2024, indicating elevated short-term obligations during those intervals.

Quick Ratio

The quick ratio, which measures immediate liquidity by comparing quick assets to current liabilities, largely remained below 1.0 throughout the timeline, suggesting constrained short-term liquidity. It started slightly above 1.0 at 1.08 in early 2021 but then declined and fluctuated mostly between 0.82 and 0.98 in subsequent quarters. A peak of 1.18 was observed in the first quarter of 2024, indicating a temporary improvement in liquidity. However, the ratio decreased again afterward but approached near 0.98 by the third quarter of 2025. These oscillations reflect variability in the company's ability to cover short-term liabilities without relying on inventory.

Overall, the data suggests that while the company experienced periods of lower immediate liquidity, especially throughout 2021 and 2022, the recent trend towards increasing quick assets combined with relatively stable current liabilities has contributed to slight improvements in the quick ratio. Nonetheless, maintaining a quick ratio consistently closer to or above 1.0 would be preferable to ensure robust short-term financial health.

Trend in Total Cash Assets

Total cash assets experienced a downward trend from March 2021 through September 2022, declining from $12,660 million to $7,965 million. This was followed by volatility through 2023, with values fluctuating between approximately $7,240 million and $8,769 million. Starting in the first quarter of 2024, there was a marked recovery, with total cash assets rising significantly to reach $13,359 million by September 2025, the highest level in the observed period.

Trend in Current Liabilities

Current liabilities showed a generally stable but slightly fluctuating pattern. Initially, they increased from $17,950 million in March 2021, peaking at $20,027 million in March 2022. Following this, there was a decline to around $17,174 million by June 2023. However, a sustained upward trend resumed from mid-2023 onward, culminating in a high of $22,639 million in September 2025. This indicates increasing short-term obligations over time, particularly in the latter part of the period.

Cash Ratio Behavior

The cash ratio exhibited variability aligned with movements in total cash assets and current liabilities. Initially, it declined from 0.71 in March 2021 to a low of 0.43 by June 2022, reflecting diminishing cash relative to current liabilities. There was some recovery toward the end of 2022 and into early 2023, with the ratio oscillating between 0.40 and 0.51. Notably, in the first quarter of 2024, the ratio peaked at 0.73, the highest value in the dataset, before falling again and stabilizing in the range of 0.46 to 0.59 up to September 2025. This pattern suggests periodic strengthening and weakening of liquidity relative to short-term obligations.

Overall Financial Insights

Over the analyzed period, there is evidence of a liquidity compression from early 2021 through mid-2022, followed by recovery in cash holdings starting in 2024. Meanwhile, current liabilities have generally increased, especially in the most recent quarters, heightening the company's short-term financial obligations. The cash ratio's fluctuations mirror these dynamics, indicating periods of constrained and improved liquidity. The sharp increase in cash assets in 2024 and beyond, together with the rise in current liabilities, may reflect strategic financial adjustments, such as increased cash reserves alongside greater operational or financial commitments.