Current Ratio
since 2005
Calculation
Emerson Electric Co., current ratio, long-term trends, calculation
| Current ratio | = | Current assets1 | ÷ | Current liabilities1 | |
|---|---|---|---|---|---|
| Sep 30, 2019 | 1.19 | = | 7,139) | ÷ | 5,976) |
| Sep 30, 2018 | 1.07 | = | 6,619) | ÷ | 6,164) |
| Sep 30, 2017 | 1.64 | = | 8,252) | ÷ | 5,045) |
| Sep 30, 2016 | 1.24 | = | 9,960) | ÷ | 8,008) |
| Sep 30, 2015 | 1.29 | = | 10,049) | ÷ | 7,800) |
| Sep 30, 2014 | 1.29 | = | 10,867) | ÷ | 8,454) |
| Sep 30, 2013 | 1.44 | = | 10,999) | ÷ | 7,625) |
| Sep 30, 2012 | 1.42 | = | 10,126) | ÷ | 7,133) |
| Sep 30, 2011 | 1.45 | = | 9,345) | ÷ | 6,465) |
| Sep 30, 2010 | 1.43 | = | 8,363) | ÷ | 5,849) |
| Sep 30, 2009 | 1.54 | = | 7,653) | ÷ | 4,956) |
| Sep 30, 2008 | 1.42 | = | 9,331) | ÷ | 6,573) |
| Sep 30, 2007 | 1.45 | = | 8,065) | ÷ | 5,546) |
| Sep 30, 2006 | 1.36 | = | 7,330) | ÷ | 5,374) |
| Sep 30, 2005 | 1.39 | = | 6,837) | ÷ | 4,931) |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
1 US$ in millions
The analysis of the annual financial data reveals several trends concerning liquidity and working capital management over the period observed.
- Current Assets
- Current assets show a general upward trajectory from 2005, beginning at $6,837 million and reaching a peak of $10,999 million in 2013. Following this peak, there is a noticeable decline to $6,619 million by 2018, with a slight recovery to $7,139 million in 2019. This indicates that the company substantially increased its short-term assets through the first half of the series, followed by a contraction in the later years.
- Current Liabilities
- Current liabilities follow a somewhat similar pattern. They rise from $4,931 million in 2005 to a high of $8,454 million in 2014. After 2014, current liabilities decrease significantly to $5,045 million in 2017, before increasing again to $6,164 million and $5,976 million in 2018 and 2019 respectively. This trend reflects fluctuations in the company's short-term obligations, peaking later than current assets and then reducing sharply before a modest rise.
- Current Ratio
- The current ratio, which measures short-term liquidity by dividing current assets by current liabilities, remains relatively stable around the range of 1.3 to 1.5 for most of the period until 2014. Between 2005 and 2014, the ratio fluctuates modestly but generally stays above 1.2, indicating a comfortable ability to cover short-term liabilities with current assets. However, there is a sharp increase to 1.64 in 2017, reflecting the lower liabilities and moderate assets, followed by a significant decline to 1.07 in 2018 and a slight recovery to 1.19 in 2019. The drop below 1.2 in the latest years suggests tightening liquidity conditions, potentially signaling increased risk of short-term cash flow constraints.
Overall, the company's liquidity position experienced expansion and contraction phases, with notable peaks in assets and liabilities around the early 2010s. The current ratio trends suggest that while the company generally maintained adequate liquidity, recent years reflect more challenging conditions. The fluctuations in current liabilities likely contributed to these changing liquidity dynamics. Monitoring this ratio closely in future periods is advisable to ensure that short-term obligations remain manageable.
Comparison to Competitors
Emerson Electric Co., current ratio, long-term trends, comparison to competitors
| Emerson Electric Co. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Sep 30, 2019 | 1.19 | 1.05 | 1.47 | 1.70 | 1.16 | 1.34 | 1.22 | 1.08 |
| Sep 30, 2018 | 1.07 | 1.08 | 1.37 | 1.47 | — | 1.29 | 1.12 | 1.13 |
| Sep 30, 2017 | 1.64 | 1.16 | 1.35 | 1.64 | — | 1.38 | 1.38 | 1.35 |
| Sep 30, 2016 | 1.24 | 1.25 | 1.22 | 1.27 | — | 1.41 | 1.20 | 1.30 |
| Sep 30, 2015 | 1.29 | 1.35 | 1.31 | 1.43 | — | 1.09 | 1.15 | 1.18 |
| Sep 30, 2014 | 1.29 | 1.20 | 1.39 | 1.51 | — | 1.50 | 1.11 | 1.30 |
| Sep 30, 2013 | 1.44 | 1.26 | 1.40 | 1.78 | — | 1.49 | 1.20 | 1.29 |
| Sep 30, 2012 | 1.42 | 1.27 | 1.43 | 1.44 | — | 1.35 | 1.14 | 1.24 |
| Sep 30, 2011 | 1.45 | 1.21 | 1.33 | 1.60 | — | 1.31 | 1.16 | 1.38 |
| Sep 30, 2010 | 1.43 | 1.15 | 1.44 | 1.70 | — | 1.28 | 1.15 | 1.33 |
| Sep 30, 2009 | 1.54 | 1.07 | 1.39 | 1.68 | — | 1.25 | 1.17 | 1.29 |
| Sep 30, 2008 | 1.42 | 0.84 | 1.21 | 1.28 | — | 1.08 | 1.01 | 1.24 |
| Sep 30, 2007 | 1.45 | 0.86 | 1.15 | 1.30 | — | 1.15 | 1.11 | 1.26 |
| Sep 30, 2006 | 1.36 | 0.77 | 1.20 | 1.29 | — | 1.21 | 1.06 | 1.24 |
| Sep 30, 2005 | 1.39 | 0.78 | 1.19 | 1.21 | — | 1.15 | 1.12 | 1.12 |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
Comparison to Sector (Capital Goods)
Emerson Electric Co., current ratio, long-term trends, comparison to sector (capital goods)
| Emerson Electric Co. | Capital Goods | |
|---|---|---|
| Sep 30, 2019 | 1.19 | 1.17 |
| Sep 30, 2018 | 1.07 | 1.17 |
| Sep 30, 2017 | 1.64 | 1.29 |
| Sep 30, 2016 | 1.24 | 1.27 |
| Sep 30, 2015 | 1.29 | 1.26 |
| Sep 30, 2014 | 1.29 | 1.29 |
| Sep 30, 2013 | 1.44 | 1.34 |
| Sep 30, 2012 | 1.42 | 1.31 |
| Sep 30, 2011 | 1.45 | 1.29 |
| Sep 30, 2010 | 1.43 | 1.28 |
| Sep 30, 2009 | 1.54 | 1.23 |
| Sep 30, 2008 | 1.42 | 1.07 |
| Sep 30, 2007 | 1.45 | 1.08 |
| Sep 30, 2006 | 1.36 | 1.05 |
| Sep 30, 2005 | 1.39 | 1.03 |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
Comparison to Industry (Industrials)
Emerson Electric Co., current ratio, long-term trends, comparison to industry (industrials)
| Emerson Electric Co. | Industrials | |
|---|---|---|
| Sep 30, 2019 | 1.19 | 1.16 |
| Sep 30, 2018 | 1.07 | 1.13 |
| Sep 30, 2017 | 1.64 | 1.24 |
| Sep 30, 2016 | 1.24 | 1.22 |
| Sep 30, 2015 | 1.29 | 1.24 |
| Sep 30, 2014 | 1.29 | 1.26 |
| Sep 30, 2013 | 1.44 | 1.33 |
| Sep 30, 2012 | 1.42 | 1.30 |
| Sep 30, 2011 | 1.45 | 1.30 |
| Sep 30, 2010 | 1.43 | 1.28 |
| Sep 30, 2009 | 1.54 | 1.23 |
| Sep 30, 2008 | 1.42 | 1.06 |
| Sep 30, 2007 | 1.45 | 1.07 |
| Sep 30, 2006 | 1.36 | 1.05 |
| Sep 30, 2005 | 1.39 | 1.05 |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).