Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
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Liquidity Ratios (Summary)
Linde plc, liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Current Ratio
- The current ratio exhibited some fluctuations over the five-year period. It started at 0.8 at the end of 2020, declined to a low of 0.74 in 2021, before gradually recovering to 0.79 in 2022 and returning to 0.8 in 2023. By the end of 2024, the ratio improved further, reaching 0.89. This upward trend in the final year suggests an improving short-term liquidity position, indicating that the company’s ability to cover its current liabilities with current assets has strengthened over time.
- Quick Ratio
- The quick ratio mirrored the general trend observed in the current ratio but remained consistently lower throughout the period. It started at 0.59 in 2020, dropped to 0.55 in 2021, then increased to 0.61 in 2022 and sustained this level in 2023. Finally, it rose to 0.67 in 2024. This pattern indicates a modestly better quick asset coverage of current liabilities in the final year, reflecting improved liquidity excluding inventory.
- Cash Ratio
- The cash ratio showed the most volatility during the period. It began at 0.27 at the end of 2020 and declined significantly to 0.21 in 2021, suggesting a weaker immediate cash position relative to current liabilities. However, it rebounded markedly to 0.33 in 2022, dipped slightly to 0.3 in 2023, and increased again to 0.33 in 2024. These movements reflect fluctuating availability of cash and cash equivalents, with an overall trend toward stabilization and slight improvement in the most recent years.
Current Ratio
Linde plc, current ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Sherwin-Williams Co. | ||||||
| Current Ratio, Sector | ||||||
| Chemicals | ||||||
| Current Ratio, Industry | ||||||
| Materials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- The current assets displayed a fluctuating but overall increasing trend over the five-year period. Starting at approximately 10,924 million US dollars at the end of 2020, the value slightly decreased in 2021 to 10,159 million, then showed a significant increase in 2022 reaching 13,047 million. In the subsequent years, current assets slightly declined to 12,620 million in 2023 but increased again to 12,945 million by the end of 2024.
- Current Liabilities
- Current liabilities exhibited a rising pattern initially, increasing steadily from 13,740 million US dollars at the end of 2020 to a peak of 16,479 million in 2022. Following this, there was a decrease observed in the next years, with liabilities dropping to 15,717 million in 2023 and further down to 14,544 million by the end of 2024.
- Current Ratio
- The current ratio, indicating liquidity, remained below 1 throughout the period, suggesting that current liabilities consistently exceeded current assets. Starting at 0.8 at the end of 2020, the ratio slightly declined to 0.74 in 2021, then improved gradually back to 0.79 in 2022 and stabilized at 0.8 in 2023. A notable improvement was observed in 2024 with the ratio increasing to 0.89, reflecting an enhanced short-term financial position.
- Summary of Financial Position
- The data indicates that although current assets experienced some volatility, they generally increased over the observed period. Current liabilities followed a different trend with a peak in 2022 and subsequent decreases, contributing to improvement in liquidity ratios. The upward movement in the current ratio towards the end of the period suggests strengthening short-term financial stability.
Quick Ratio
Linde plc, quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Accounts receivable, net | ||||||
| Contract assets | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Sherwin-Williams Co. | ||||||
| Quick Ratio, Sector | ||||||
| Chemicals | ||||||
| Quick Ratio, Industry | ||||||
| Materials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Quick Assets
- The total quick assets exhibited fluctuations over the analyzed period. Starting at 8,083 million US dollars at the end of 2020, there was a decline to 7,456 million in 2021. Subsequently, a noticeable increase occurred, peaking at 10,119 million in 2022. This was followed by a minor decrease in 2023 to 9,578 million and a slight recovery to 9,735 million in 2024. Overall, quick assets showed a volatile yet upward tendency when comparing the start and end of the period.
- Current Liabilities
- Current liabilities maintained a generally upward trend through the period but with some variability. Beginning at 13,740 million US dollars in 2020, the liabilities slightly decreased to 13,643 million in 2021. Then, a significant increase occurred in 2022 to 16,479 million. This was followed by a reduction to 15,717 million in 2023 and a further decrease to 14,544 million in 2024. Despite the fluctuations, current liabilities ended higher than at the beginning of the period.
- Quick Ratio
- The quick ratio demonstrated a gradual improvement across the five years. Starting at 0.59 in 2020, it slightly declined to 0.55 in 2021, reflecting a temporary decrease in short-term liquidity relative to current liabilities. From 2022 onwards, the ratio held steady at 0.61 for two consecutive years and then increased further to 0.67 by the end of 2024. This indicates a strengthening position in meeting short-term obligations with liquid assets by the end of the period.
- Summary of Financial Liquidity
- Despite some year-to-year volatility in total quick assets and current liabilities, the overall trend suggests improved short-term liquidity. The rising quick ratio over the latter years supports this conclusion, indicating enhanced capability to cover current liabilities with liquid assets. This improvement is noteworthy given the relatively high level of current liabilities maintained throughout the period.
Cash Ratio
Linde plc, cash ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Sherwin-Williams Co. | ||||||
| Cash Ratio, Sector | ||||||
| Chemicals | ||||||
| Cash Ratio, Industry | ||||||
| Materials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets exhibit notable fluctuations over the analyzed periods. Initially, there is a decline from 3,754 million USD at the end of 2020 to 2,823 million USD at the end of 2021. This is followed by a sharp increase to 5,436 million USD in 2022. In the subsequent years, the amount decreases to 4,664 million USD in 2023 but shows a slight rebound to 4,850 million USD by the end of 2024. Overall, the cash assets end the period significantly higher compared to the initial value, despite intermediate volatility.
- Current liabilities
- Current liabilities maintain a generally upward trend from 13,740 million USD at the end of 2020, increasing marginally to 13,643 million USD in 2021 and then rising more substantially to 16,479 million USD in 2022. After peaking in 2022, current liabilities slightly decrease to 15,717 million USD in 2023 and further reduce to 14,544 million USD by the end of 2024. Despite the recent decreases, current liabilities remain elevated compared to the 2020 level.
- Cash ratio
- The cash ratio follows a similar pattern to total cash assets, indicating the company's liquidity position relative to current liabilities. Beginning at 0.27 in 2020, the ratio declines to 0.21 in 2021, suggesting a decrease in liquidity. This is followed by an improvement to 0.33 in 2022, then a slight decline to 0.30 in 2023, and stabilizes again at 0.33 in 2024. The trend shows a recovery in liquidity after 2021, with the ratio ending higher than the initial period.