Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Eaton Corp. plc, liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
The analysis of key liquidity ratios over multiple quarters reveals the following trends and insights:
- Current Ratio
- The current ratio demonstrates significant fluctuation during the initial periods, starting relatively high, followed by a decline reaching below 1.0 in early 2022, indicating a potential short-term liquidity concern at that time. Subsequently, the ratio recovers steadily, peaking around 1.56 in mid-2024. However, towards the latest recorded periods, the ratio experiences a noticeable decline again, falling to approximately 1.24 by mid-2025. Overall, the current ratio trend suggests varying liquidity positions with some periods of strengthened short-term asset coverage against liabilities, followed by a moderate weakening in the most recent quarters.
- Quick Ratio
- The quick ratio follows a broadly similar pattern to the current ratio but at lower absolute levels, reflecting the exclusion of inventory from current assets. Initially, the ratio is quite low, lingering below 0.7 for several quarters. Starting in late 2022, the quick ratio shows a phase of improvement, reaching close to 0.94 in mid-2024, indicating improved immediate liquidity. However, a decline is visible in the last few quarters, falling to around 0.63 by mid-2025. The improvements suggest better ability to meet short-term obligations without relying on inventory sales during certain periods, followed by decreased liquidity near the end of the dataset.
- Cash Ratio
- The cash ratio remains consistently the lowest among the liquidity ratios, reflecting the most conservative measure of liquidity by considering only cash and cash equivalents. This ratio starts very low, under 0.1, and stays relatively flat with minor fluctuations until early 2023. There is a marked improvement in cash holdings in mid to late 2023, peaking at approximately 0.34 in early to mid-2024. Subsequently, the ratio decreases again toward mid-2025, reaching similar lower levels as at the start of the observed period. This pattern suggests variable cash position management, with a period of increased liquidity reserve followed by reduction, potentially indicating changing cash flow dynamics.
In summary, the liquidity ratios exhibit phases of decline followed by recovery and subsequent weakening, highlighting variability in the company’s short-term financial health. The improvements during 2023 to 2024 suggest enhanced liquidity management in those years, while the recent downward trends caution about potential liquidity tightening moving into 2025. These patterns merit attention for ongoing monitoring and possible liquidity risk mitigation strategies.
Current Ratio
Eaton Corp. plc, current ratio calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current assets | 11,897) | 12,434) | 11,801) | 12,152) | 12,652) | 11,853) | 11,675) | 10,983) | 10,303) | 9,138) | 8,746) | 8,540) | 8,687) | 8,194) | 7,511) | 7,487) | 9,789) | 9,905) | ||||||
| Current liabilities | 9,594) | 9,522) | 7,857) | 7,941) | 8,120) | 7,613) | 7,747) | 7,563) | 6,725) | 6,087) | 6,360) | 6,653) | 8,974) | 8,256) | 7,212) | 5,914) | 8,906) | 6,581) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Current ratio1 | 1.24 | 1.31 | 1.50 | 1.53 | 1.56 | 1.56 | 1.51 | 1.45 | 1.53 | 1.50 | 1.38 | 1.28 | 0.97 | 0.99 | 1.04 | 1.27 | 1.10 | 1.51 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 1.23 | 1.23 | 1.32 | 1.12 | 1.18 | 1.14 | 1.14 | 1.15 | 1.17 | 1.16 | 1.22 | 1.22 | 1.25 | 1.30 | 1.33 | 1.36 | 1.35 | 1.33 | ||||||
| Caterpillar Inc. | 1.34 | 1.32 | 1.42 | 1.40 | 1.28 | 1.35 | 1.35 | 1.45 | 1.33 | 1.43 | 1.39 | 1.41 | 1.45 | 1.44 | 1.46 | 1.61 | 1.56 | 1.60 | ||||||
| GE Aerospace | 1.04 | 1.08 | 1.09 | 1.13 | 1.14 | 1.17 | 1.18 | 1.17 | 1.25 | 1.25 | 1.16 | 1.10 | 1.13 | 1.19 | 1.28 | 1.80 | 1.81 | 1.96 | ||||||
| Honeywell International Inc. | 1.29 | 1.25 | 1.31 | 1.44 | 1.21 | 1.66 | 1.27 | 1.35 | 1.41 | 1.26 | 1.25 | 1.24 | 1.20 | 1.21 | 1.30 | 1.29 | 1.41 | 1.43 | ||||||
| Lockheed Martin Corp. | 0.98 | 1.08 | 1.13 | 1.30 | 1.24 | 1.30 | 1.21 | 1.36 | 1.36 | 1.30 | 1.32 | 1.28 | 1.27 | 1.27 | 1.42 | 1.42 | 1.36 | 1.38 | ||||||
| RTX Corp. | 1.01 | 1.01 | 0.99 | 0.99 | 0.99 | 1.07 | 1.04 | 1.03 | 1.10 | 1.13 | 1.09 | 1.09 | 1.10 | 1.16 | 1.19 | 1.23 | 1.17 | 1.17 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= 11,897 ÷ 9,594 = 1.24
2 Click competitor name to see calculations.
- Current assets
- The current assets exhibit a fluctuating pattern from March 2021 to June 2025. Initially, there was a decline from 9,905 million USD in March 2021 to a low of 7,487 million USD in September 2021, followed by a modest recovery towards the end of 2021. During 2022, current assets generally increased, reaching a peak of 11,675 million USD in December 2022. This upward trend largely continued into 2023 and early 2024, with current assets hitting their highest point of 12,652 million USD in June 2024. However, in the latter half of 2024 and into 2025, current assets showed a gradual decline, ending at 11,897 million USD in June 2025.
- Current liabilities
- Current liabilities displayed more volatility across the same period. Starting at 6,581 million USD in March 2021, there was a sharp increase to 8,906 million USD in June 2021, followed by a significant drop to 5,914 million USD in September 2021. Liabilities increased again through 2021 and 2022, fluctuating between approximately 6,360 and 8,974 million USD. In 2023, current liabilities maintained an upward trend, peaking at 7,747 million USD in December, before staying relatively stable in early 2024 and then rising significantly in 2025, reaching 9,594 million USD by June 2025.
- Current ratio
- The current ratio moved in close relation to the trends in current assets and liabilities. It started above 1.5 in March 2021, then declined markedly through mid-2021, reaching near or below 1.0 by mid-2022, indicating a tighter liquidity position. A rebound occurred during late 2022 through 2023, with ratios consistently above 1.4 and peaking near 1.56 in mid-2024. In 2025, the current ratio showed a decline again to around 1.24 by mid-year, reflecting that current liabilities grew faster than current assets during this time. Overall, the ratio suggests fluctuations in short-term liquidity, with periods of strain followed by recovery, but a recent trend toward reduced liquidity buffer.
Quick Ratio
Eaton Corp. plc, quick ratio calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cash | 398) | 1,777) | 555) | 473) | 540) | 473) | 488) | 348) | 353) | 235) | 294) | 231) | 364) | 237) | 297) | 271) | 279) | 354) | ||||||
| Short-term investments | 186) | 162) | 1,525) | 1,521) | 2,241) | 1,969) | 2,121) | 1,558) | 977) | 289) | 261) | 287) | 259) | 268) | 271) | 389) | 261) | 945) | ||||||
| Accounts receivable, net | 5,486) | 5,094) | 4,619) | 4,886) | 4,861) | 4,674) | 4,475) | 4,460) | 4,399) | 4,239) | 4,076) | 3,816) | 3,837) | 3,667) | 3,297) | 3,393) | 3,341) | 3,065) | ||||||
| Total quick assets | 6,070) | 7,033) | 6,699) | 6,880) | 7,642) | 7,116) | 7,084) | 6,366) | 5,729) | 4,763) | 4,631) | 4,334) | 4,460) | 4,172) | 3,865) | 4,053) | 3,881) | 4,364) | ||||||
| Current liabilities | 9,594) | 9,522) | 7,857) | 7,941) | 8,120) | 7,613) | 7,747) | 7,563) | 6,725) | 6,087) | 6,360) | 6,653) | 8,974) | 8,256) | 7,212) | 5,914) | 8,906) | 6,581) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Quick ratio1 | 0.63 | 0.74 | 0.85 | 0.87 | 0.94 | 0.93 | 0.91 | 0.84 | 0.85 | 0.78 | 0.73 | 0.65 | 0.50 | 0.51 | 0.54 | 0.69 | 0.44 | 0.66 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 0.34 | 0.35 | 0.39 | 0.24 | 0.26 | 0.22 | 0.28 | 0.28 | 0.28 | 0.29 | 0.32 | 0.29 | 0.28 | 0.29 | 0.34 | 0.38 | 0.38 | 0.37 | ||||||
| Caterpillar Inc. | 0.72 | 0.69 | 0.80 | 0.76 | 0.69 | 0.73 | 0.74 | 0.76 | 0.74 | 0.79 | 0.79 | 0.78 | 0.81 | 0.84 | 0.89 | 1.00 | 1.02 | 1.08 | ||||||
| GE Aerospace | 0.70 | 0.74 | 0.78 | 0.81 | 0.81 | 0.76 | 0.78 | 0.76 | 0.84 | 0.86 | 0.81 | 0.73 | 0.75 | 0.82 | 0.93 | 0.90 | 0.90 | 1.06 | ||||||
| Honeywell International Inc. | 0.90 | 0.83 | 0.88 | 0.96 | 0.83 | 1.18 | 0.84 | 0.92 | 0.98 | 0.84 | 0.88 | 0.85 | 0.82 | 0.84 | 0.94 | 0.96 | 1.06 | 1.08 | ||||||
| Lockheed Martin Corp. | 0.80 | 0.87 | 0.92 | 1.10 | 1.05 | 1.08 | 0.99 | 1.14 | 1.14 | 1.07 | 1.09 | 1.06 | 1.03 | 1.03 | 1.15 | 1.18 | 1.10 | 1.09 | ||||||
| RTX Corp. | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 0.64 | 0.63 | 0.63 | 0.68 | 0.71 | 0.69 | 0.70 | 0.71 | 0.76 | 0.81 | 0.82 | 0.79 | 0.79 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 6,070 ÷ 9,594 = 0.63
2 Click competitor name to see calculations.
The financial data indicates several evolving trends in the company's liquidity position over the periods analyzed.
- Total Quick Assets
- The total quick assets exhibit notable fluctuations with an overall increasing tendency from early 2021 through late 2024, moving from approximately $4,364 million to a peak of about $7,642 million in mid-2024. This upward trend is followed by a decline towards 2025, where quick assets fall back to around $6,070 million. The increase in quick assets over this period suggests an enhancement in highly liquid assets available for meeting short-term obligations in the mid-term, although the decline in the latest quarters may indicate some liquidity utilization or shifts in asset composition.
- Current Liabilities
- Current liabilities show significant volatility with occasional sharp increases and decreases. Starting at $6,581 million in Q1 2021, liabilities spike notably in Q2 2021 to $8,906 million but then fall back in subsequent quarters. From 2022 onward, the liabilities generally hover between roughly $6,000 million and $8,000 million, with a pronounced increase in the first half of 2025 reaching peaks around $9,500 million. This trend suggests fluctuating short-term obligations, which may reflect changes in operational or financing activities.
- Quick Ratio
- The quick ratio trends align inversely with current liabilities' volatility and reflect the liquidity status relative to current liabilities. The ratio starts at 0.66 in early 2021, dips to around 0.44 mid-year, and then recovers steadily, reaching highs above 0.9 by late 2023 and mid-2024. After peaking, the ratio declines again to 0.63 by mid-2025. This pattern indicates an improvement in liquidity coverage through 2023 and into 2024, followed by a deterioration more recently, consistent with rising current liabilities and the decrease in quick assets during this period.
In summary, the company’s short-term liquidity improved considerably over the middle of the period under review, supported by growth in liquid assets and controlled liabilities, as reflected in a rising quick ratio. However, the most recent quarters show signs of weakening liquidity, driven by both an increase in current liabilities and a contraction in quick assets. This shift warrants attention as it may affect the company's ability to meet short-term obligations promptly if the trend continues.
Cash Ratio
Eaton Corp. plc, cash ratio calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cash | 398) | 1,777) | 555) | 473) | 540) | 473) | 488) | 348) | 353) | 235) | 294) | 231) | 364) | 237) | 297) | 271) | 279) | 354) | ||||||
| Short-term investments | 186) | 162) | 1,525) | 1,521) | 2,241) | 1,969) | 2,121) | 1,558) | 977) | 289) | 261) | 287) | 259) | 268) | 271) | 389) | 261) | 945) | ||||||
| Total cash assets | 584) | 1,939) | 2,080) | 1,994) | 2,781) | 2,442) | 2,609) | 1,906) | 1,330) | 524) | 555) | 518) | 623) | 505) | 568) | 660) | 540) | 1,299) | ||||||
| Current liabilities | 9,594) | 9,522) | 7,857) | 7,941) | 8,120) | 7,613) | 7,747) | 7,563) | 6,725) | 6,087) | 6,360) | 6,653) | 8,974) | 8,256) | 7,212) | 5,914) | 8,906) | 6,581) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Cash ratio1 | 0.06 | 0.20 | 0.26 | 0.25 | 0.34 | 0.32 | 0.34 | 0.25 | 0.20 | 0.09 | 0.09 | 0.08 | 0.07 | 0.06 | 0.08 | 0.11 | 0.06 | 0.20 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 0.22 | 0.23 | 0.27 | 0.11 | 0.13 | 0.08 | 0.17 | 0.14 | 0.15 | 0.16 | 0.19 | 0.16 | 0.14 | 0.15 | 0.20 | 0.23 | 0.24 | 0.24 | ||||||
| Caterpillar Inc. | 0.16 | 0.11 | 0.21 | 0.17 | 0.13 | 0.15 | 0.20 | 0.20 | 0.21 | 0.21 | 0.22 | 0.21 | 0.21 | 0.22 | 0.31 | 0.36 | 0.39 | 0.43 | ||||||
| GE Aerospace | 0.33 | 0.38 | 0.42 | 0.47 | 0.47 | 0.43 | 0.45 | 0.42 | 0.49 | 0.52 | 0.44 | 0.35 | 0.37 | 0.44 | 0.54 | 0.52 | 0.50 | 0.67 | ||||||
| Honeywell International Inc. | 0.49 | 0.46 | 0.52 | 0.56 | 0.47 | 0.73 | 0.44 | 0.46 | 0.51 | 0.40 | 0.51 | 0.44 | 0.43 | 0.49 | 0.59 | 0.60 | 0.68 | 0.71 | ||||||
| Lockheed Martin Corp. | 0.05 | 0.09 | 0.13 | 0.18 | 0.14 | 0.16 | 0.09 | 0.21 | 0.21 | 0.14 | 0.16 | 0.15 | 0.11 | 0.12 | 0.26 | 0.18 | 0.18 | 0.20 | ||||||
| RTX Corp. | 0.09 | 0.10 | 0.11 | 0.13 | 0.12 | 0.12 | 0.14 | 0.12 | 0.13 | 0.15 | 0.16 | 0.14 | 0.13 | 0.17 | 0.22 | 0.22 | 0.23 | 0.24 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 584 ÷ 9,594 = 0.06
2 Click competitor name to see calculations.
- Total Cash Assets
- Over the observed periods, total cash assets exhibit significant fluctuations. Initially, there is a decline from 1299 million US dollars to a low of 505 million by March 31, 2022. Subsequently, a recovery phase is evident, with cash holdings rising sharply to peak at 2609 million by December 31, 2023. Following this peak, cash assets show some variability but tend to decrease, ending at 584 million by June 30, 2025. This pattern suggests periods of both consolidation and expenditure or investment activity.
- Current Liabilities
- Current liabilities demonstrate a generally high and somewhat volatile trend. Values peak at 9522 million by March 31, 2025, which is among the highest levels observed. Earlier periods show variability, with liabilities often fluctuating between approximately 5900 million and 8900 million. The upward movement towards the later dates indicates an increase in short-term obligations over time, potentially reflecting operational or financing considerations.
- Cash Ratio
- The cash ratio, which measures liquidity by comparing cash assets to current liabilities, mirrors the fluctuations seen in cash assets relative to liabilities. Initially low and fluctuating below 0.1, the ratio improves markedly starting around June 30, 2023, peaking at 0.34 by December 31, 2023. Despite this improvement, the ratio decreases again towards the end of the period, falling back to 0.06 by June 30, 2025. This indicates that although liquidity improved temporarily, the ability to cover current liabilities with cash diminished near the end of the timeframe.
- Overall Insights
- The financial data indicates a cyclical pattern in liquidity and cash management. There are periods of increased cash accumulation followed by steep declines, coinciding with varying levels of current liabilities. The temporary improvement in the cash ratio during 2023 suggests a successful effort to strengthen liquidity, but the subsequent decline raises questions about sustaining this position. The increasing trend in current liabilities suggests growing short-term financial commitments, which may warrant attention in context of the declining cash ratio in the final periods.