Linde plc (NASDAQ:LIN)

The liquidity position, as indicated by the assessed ratios, demonstrates a generally improving trend over the five-year period. While the current and quick ratios remain below one for the entirety of the observed period, they exhibit consistent increases, suggesting a strengthening ability to meet short-term obligations. The cash ratio also shows improvement, though it remains the lowest of the three metrics.

Current Ratio

The current ratio increased from 0.74 in 2021 to 0.89 in 2024, before slightly decreasing to 0.88 in 2025. This indicates a gradual improvement in the company’s ability to cover its current liabilities with current assets. The increase suggests enhanced short-term solvency, although a value below 1.0 continues to indicate that current liabilities exceed current assets.

Quick Ratio

The quick ratio followed a similar upward trajectory, rising from 0.55 in 2021 to 0.68 in 2025, with a plateau at 0.61 in both 2022 and 2023. This improvement suggests a strengthening ability to meet short-term obligations with the most liquid assets, excluding inventory. The consistent, albeit modest, increase is a positive signal.

Cash Ratio

The cash ratio experienced an initial increase from 0.21 in 2021 to 0.33 in 2022, then stabilized at 0.30 in 2023 before returning to 0.33 and remaining constant through 2024 and 2025. This indicates a relatively stable capacity to cover immediate liabilities with cash and cash equivalents. While the lowest of the three ratios, the improvement from 2021 suggests increased liquidity.

Overall, the observed trends suggest a positive, though incremental, improvement in the company’s liquidity position. The increases in all three ratios indicate a reduced risk of short-term financial distress. However, the current and quick ratios remaining below 1.0 warrant continued monitoring.

The current ratio exhibits a generally improving trend over the five-year period, although fluctuations are present. Initial values indicate a relatively constrained liquidity position, which strengthens over time before stabilizing.

Current Ratio Trend

The current ratio began at 0.74 in 2021. An incremental increase was observed in 2022, reaching 0.79, and continued modestly into 2023, arriving at 0.80. A more substantial improvement occurred in 2024, with the ratio rising to 0.89. In the most recent year presented, 2025, the ratio experienced a slight decrease to 0.88.

The initial values below 1.0 suggest the entity may have faced challenges in meeting its short-term obligations with its short-term assets. However, the upward trajectory indicates a strengthening ability to cover current liabilities. The peak in 2024 suggests improved short-term financial flexibility. The slight decline in 2025 does not necessarily indicate a cause for concern, but warrants further investigation to determine the underlying factors contributing to this change.

Underlying Components

Current assets increased from US$10,159 million in 2021 to US$13,325 million in 2025, demonstrating overall growth. Current liabilities also increased over the period, rising from US$13,643 million in 2021 to US$15,198 million in 2025. The ratio’s improvement is not solely attributable to asset growth, as the rate of increase in current assets outpaced that of current liabilities, particularly between 2023 and 2024.

The observed trend suggests a positive development in the entity’s short-term liquidity position. Continued monitoring of this ratio, alongside its underlying components, is recommended to assess the sustainability of this improvement and to identify any potential risks.

The quick ratio exhibited an improving trend over the five-year period. Initially, the ratio stood at 0.55 in 2021 and progressively increased to 0.68 by 2025. This indicates a strengthening ability to meet short-term obligations with the most liquid assets.

Quick Ratio Trend

The quick ratio increased from 0.55 in 2021 to 0.61 in 2022, representing a moderate improvement. The ratio remained stable at 0.61 in 2023 before further increasing to 0.67 in 2024 and reaching 0.68 in 2025. This consistent upward movement suggests a positive development in the company’s short-term liquidity position.

Relationship between Quick Assets and Current Liabilities

Total quick assets increased from US$7,456 million in 2021 to US$10,291 million in 2025, demonstrating overall growth in highly liquid assets. Current liabilities also increased over the period, rising from US$13,643 million in 2021 to US$15,198 million in 2025. However, the growth in quick assets outpaced the growth in current liabilities, contributing to the observed improvement in the quick ratio.

The consistent increase in the quick ratio suggests the company is becoming less reliant on converting inventory into cash to cover immediate liabilities. This could be due to improved working capital management, increased cash holdings, or a more efficient use of current assets.

The cash ratio exhibited a fluctuating, yet generally stable, pattern over the five-year period. Total cash assets and current liabilities both experienced increases during the observed timeframe, influencing the ratio’s behavior.

Cash Ratio Trend

The cash ratio began at 0.21 in 2021, indicating that for every dollar of current liabilities, the entity held 21 cents in cash. This ratio increased to 0.33 in 2022, representing an improvement in the company’s immediate liquidity position. It then decreased slightly to 0.30 in 2023 before returning to 0.33 in both 2024 and 2025, suggesting a stabilization around this level.

Total Cash Assets

Total cash assets increased significantly from US$2,823 million in 2021 to US$5,436 million in 2022. A subsequent decrease to US$4,664 million was observed in 2023. Cash assets then showed modest growth, reaching US$4,850 million in 2024 and US$5,056 million in 2025. This indicates a generally healthy cash position, despite some year-over-year volatility.

Current Liabilities

Current liabilities increased from US$13,643 million in 2021 to US$16,479 million in 2022. A decrease to US$15,717 million was noted in 2023, followed by a further reduction to US$14,544 million in 2024. Current liabilities then increased again to US$15,198 million in 2025. The fluctuations in current liabilities contribute to the observed changes in the cash ratio.

Overall, the entity maintained a cash ratio above 0.20 throughout the period, suggesting a reasonable ability to meet its short-term obligations with readily available cash. The stabilization of the ratio at 0.33 in the latter years indicates a consistent liquidity profile.