RTX Corp. (NYSE:RTX)

The liquidity position, as indicated by the observed ratios, exhibits generally stable but subtly declining trends over the analyzed period. The current, quick, and cash ratios all demonstrate fluctuations, but a consistent downward pressure is apparent, particularly in the latter half of the period.

Current Ratio

The current ratio began at 1.16 and generally decreased to a low of 0.99, sustained for three consecutive quarters, before modestly recovering to 1.03 by the end of the period. This suggests a slight weakening in the company’s ability to cover its short-term liabilities with short-term assets. The initial decline from 2022 to 2023 was relatively gradual, but the stabilization at approximately 0.99 raises a potential concern regarding short-term solvency. The final increase suggests a possible, but limited, improvement.

Quick Ratio

The quick ratio, which excludes inventory from current assets, mirrors the trend of the current ratio, starting at 0.76 and declining to 0.60, where it remained constant for four quarters. A subsequent increase to 0.67 is observed, but remains below the initial value. This indicates a more pronounced weakening in the ability to meet short-term obligations with the most liquid assets. The sustained level of 0.60 suggests a consistent challenge in immediate debt coverage.

Cash Ratio

The cash ratio, representing the ability to cover short-term liabilities with only cash and cash equivalents, demonstrates the most significant decline. Starting at 0.17, it decreased to a low of 0.09 before recovering slightly to 0.13. This indicates a substantial reduction in the proportion of current liabilities covered by immediately available funds. The fluctuations are relatively small, but the overall downward trend is clear, suggesting increasing reliance on other current assets to meet short-term obligations.

Overall, the observed trends suggest a gradual erosion of the company’s liquidity position. While the ratios remain above zero, the consistent declines, particularly in the quick and cash ratios, warrant attention. The slight recoveries observed in the most recent quarters offer a limited offset to the preceding downward trends and require continued monitoring to assess their sustainability.

The current ratio for the analyzed period demonstrates a generally stable, though slightly declining, liquidity position. Initial values indicate a ratio above 1.10, suggesting a comfortable ability to cover short-term obligations with short-term assets. However, a gradual decrease is observed throughout the period, with a noticeable dip in the latter half of the analyzed timeframe.

Overall Trend

The current ratio experienced fluctuations but generally trended downwards from March 31, 2022, to December 31, 2023. A slight recovery is then observed through September 30, 2025, but the ratio remains relatively close to 1.0.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The current ratio began at 1.16 and decreased to 1.09 over this period. While a decline is present, the ratio remained above 1.0, indicating the entity maintained sufficient current assets to cover current liabilities.

Subsequent Decline (Mar 31, 2023 – Dec 31, 2023)

A continued downward trend is evident, with the ratio falling from 1.13 to 1.04. This suggests a relative increase in current liabilities compared to current assets, potentially indicating increased short-term financing needs or slower collection of receivables.

Stabilization and Slight Recovery (Mar 3, 2024 – Dec 31, 2025)

The ratio reached its lowest point of 0.99 in June and December 2024. A modest recovery is then seen, with the ratio increasing to 1.07 by September 30, 2025, before settling at 1.03 by December 31, 2025. This suggests some improvement in the short-term liquidity position, but the ratio remains near the lower end of the observed range.

The consistent proximity of the current ratio to 1.0 throughout much of the analyzed period warrants attention. While not immediately concerning, sustained values near 1.0 indicate a limited margin of safety in meeting short-term obligations. Continued monitoring of this ratio, alongside other liquidity metrics, is recommended.

The quick ratio for the analyzed period demonstrates a generally stable, though modestly concerning, trend. Throughout the observed timeframe, the ratio fluctuates within a relatively narrow range, consistently below 1.0. This suggests a potential limitation in the company’s ability to meet its short-term obligations with its most liquid assets.

Overall Trend

The quick ratio experienced a slight decline from 0.76 in March 2022 to a low of 0.60 in June 2024, remaining at that level through December 2024. A modest recovery is then observed, with the ratio increasing to 0.67 in September 2025 and holding steady at 0.67 in December 2025.

Short-Term Fluctuations (2022-2023)

From March 2022 through December 2023, the quick ratio exhibited a gradual downward trend, decreasing from 0.76 to 0.63. This period reflects a consistent increase in current liabilities outpacing the growth of quick assets.

Period of Stability (2024)

The year 2024 shows a period of relative stability, with the quick ratio remaining consistently at 0.60 for the first three quarters and then holding at 0.60 for the final quarter. This indicates a balance between quick assets and current liabilities, albeit at a level below one.

Recent Improvement (2025)

The final two quarters analyzed show a slight improvement, with the quick ratio increasing to 0.67 and remaining stable. This suggests a potential positive shift in the company’s short-term liquidity position, possibly due to increased quick assets or a slower growth rate in current liabilities.

The consistent quick ratio below 1.0 throughout the period warrants continued monitoring. While the recent slight improvement is encouraging, the company’s ability to comfortably cover its immediate liabilities remains a potential area of concern. Further investigation into the composition of quick assets and current liabilities is recommended to understand the underlying drivers of these trends.

The cash ratio for the analyzed period demonstrates a generally low and fluctuating level of immediate liquidity. While there are some quarterly increases, the overall trend suggests a modest decline in the company’s ability to cover its current liabilities with only cash and cash equivalents.

Overall Trend

The cash ratio began at 0.17 in March 2022 and generally decreased to 0.09 by March 2025, before showing a slight recovery to 0.13 by December 2025. This indicates a weakening position in terms of covering short-term obligations with the most liquid assets. The fluctuations suggest sensitivity to changes in either cash holdings or current liabilities.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The cash ratio experienced a decrease from 0.17 to 0.16 during this period. Total cash assets decreased from US$6,040 million to US$6,220 million, while current liabilities increased from US$35,057 million to US$39,114 million. This suggests that the increase in current liabilities outpaced the increase in cash assets, contributing to the slight decline in the ratio.

Subsequent Decline (Mar 31, 2023 – Mar 31, 2025)

From March 2023 to March 2025, the cash ratio declined from 0.15 to 0.10. This period saw a consistent increase in current liabilities, rising from US$40,128 million to US$52,624 million. While cash assets fluctuated, they did not increase sufficiently to offset the growth in liabilities. The lowest point of 0.09 in March 2025 represents the weakest immediate liquidity position within the observed timeframe.

Recent Recovery (Jun 30, 2025 – Dec 31, 2025)

The final two quarters show a modest recovery, with the cash ratio increasing from 0.09 to 0.13. This improvement is attributable to a significant increase in total cash assets, rising from US$4,782 million to US$7,435 million, while current liabilities increased at a slower rate, from US$54,332 million to US$58,784 million. This suggests a recent effort to bolster the company’s immediate liquidity.

In summary, the cash ratio indicates a generally constrained ability to meet short-term obligations with available cash. The recent increase in the ratio is a positive sign, but the overall trend over the analyzed period suggests a need for continued monitoring of liquidity management.