RTX Corp. (NYSE:RTX)

Current Ratio

The current ratio exhibits a generally declining trend over the analyzed period. Starting at 1.23 in March 2020, it fluctuated slightly in subsequent quarters but followed an overall downward trajectory, reaching a low of 0.99 between June 2024 and December 2024. A modest recovery to 1.01 is noted in March 2025. This decline suggests a gradual decrease in the company's ability to cover short-term liabilities with short-term assets, signaling a potential tightening of liquidity over time.

Quick Ratio

The quick ratio also demonstrates a declining pattern, moving from 0.81 in March 2020 down to 0.60 by the end of the period in March 2025. The ratio experienced minor fluctuations but remained on a downward path, particularly after March 2022 where it decreased more noticeably. This reduction indicates a weakening liquid asset position when inventories are excluded, implying that the company’s readily available assets relative to current liabilities have diminished.

Cash Ratio

The cash ratio shows the most pronounced decrease among the three liquidity metrics. Beginning at 0.25 in March 2020, it dropped steadily to 0.10 by the last quarter reported in March 2025. Periodic small increases were observed, but these were insufficient to offset the overall decline. This trend reflects a significant reduction in cash and cash equivalents relative to current liabilities, indicating tightened immediate liquidity and potentially higher reliance on other short-term assets or financing to meet obligations.

Overall Liquidity Analysis

Collectively, the downward trends in the current, quick, and cash ratios suggest that the company’s short-term financial health has gradually weakened over the reported period. The most notable deterioration is in the cash ratio, underscoring a declining cash buffer. While current and quick ratios remain above the critical threshold of 1 for most periods, the latter stages of the timeline indicate ratios hovering near or below 1, which could raise concerns about the company's ability to cover short-term liabilities without liquidating inventory or relying on cash reserves.

The analysis of the quarterly financial data reveals several trends in the liquidity position and working capital management over the observed periods.

Current Assets

Current assets generally increased over time, starting at approximately 38,875 million US dollars in the first quarter of 2020 and reaching around 52,916 million US dollars by the third quarter of 2024. There were some fluctuations observed, such as a slight decline in mid-2021 and early 2022, but the overall trajectory remains upward, indicating growth in assets readily convertible to cash.

Current Liabilities

Current liabilities also increased but at a rate somewhat comparable to current assets. Beginning at 31,502 million US dollars in early 2020, liabilities rose to about 52,624 million US dollars by early 2025. There are notable increases particularly from the first quarter of 2023 onwards, with several peaks suggesting periods of elevated short-term obligations.

Current Ratio

The current ratio, which measures the ability to cover short-term liabilities with short-term assets, displayed a declining trend from 1.23 in early 2020 to a low point near 0.99 during 2024. This indicates a gradual reduction in liquidity buffer over the period. Although the ratio improved slightly to 1.01 by the first quarter of 2025, it remains close to 1, signaling that current assets are only marginally sufficient to meet current liabilities. The ratio values predominantly hovered around or slightly above 1.0 from 2022 onward, reflecting tighter liquidity conditions relative to earlier years.

Overall, the data indicates an expansion in both current assets and liabilities, with liabilities increasing at a pace that narrows the liquidity cushion as measured by the current ratio. This pattern suggests a need for continued attention to short-term financial flexibility and working capital management to maintain a healthy liquidity position.

Total Quick Assets

The total quick assets showed moderate fluctuations over the period from March 2020 to March 2025. Initially, there was an upward trend, with values moving from 25,654 million US dollars in March 2020 to a peak of around 28,854 million in December 2020. After a slight dip in early 2022, the quick assets generally increased again reaching approximately 31,824 million by March 2025. This reflects a gradual improvement in liquid asset holdings over the years despite some short-term volatility.

Current Liabilities

Current liabilities exhibited a consistent upward trajectory throughout the observed period. Starting at 31,502 million US dollars in March 2020, the liabilities increased nearly every quarter, reaching a high of 52,624 million by March 2025. This steady rise in obligations indicates growing short-term liabilities, which may be associated with increased operational scale or financing needs.

Quick Ratio

The quick ratio displayed a downward trend over the timeframe. It started at 0.81 in March 2020, fluctuated slightly around the 0.75 to 0.84 range during the initial quarters, and then gradually declined to about 0.6 by March 2025. The general decrease in this ratio suggests a deterioration in liquidity, as the growth in quick assets did not keep pace with the increase in current liabilities. A quick ratio consistently around or below 0.6 indicates potential short-term financial stress or reduced buffer to cover immediate liabilities with liquid assets.

The quarterly financial data reveals several notable trends concerning liquidity and short-term obligations over the specified periods.

Total Cash Assets

The total cash assets exhibit fluctuations throughout the years. Initially, there was an increase from $8,001 million in March 2020 to a peak of $10,001 million in September 2020, followed by a general downward trend through June 2022, reaching a low of $4,767 million. From that point onward, cash assets showed some recovery with intermittent rises and falls, reaching $6,682 million in September 2024 before declining again to $5,157 million by March 2025. Overall, cash liquidity appears to have weakened relative to the earlier period.

Current Liabilities

Current liabilities present a steady upward trajectory across the timeline. Starting at $31,502 million in March 2020, liabilities increased consistently, reaching $52,624 million by March 2025. There are no significant drops or reversals, indicating increasing short-term financial obligations.

Cash Ratio

The cash ratio, which measures the company's liquidity by comparing cash assets to current liabilities, shows a declining trend, underscoring a shift in liquidity position. It started at 0.25 in March 2020, slightly rose to 0.28 in September 2020, but then declined progressively over time. By March 2025, the ratio dropped to 0.10, indicating that cash assets cover only 10% of current liabilities. This continuous decline suggests reduced financial flexibility and a potential increase in liquidity risk.

In summary, while total cash assets fluctuated, the persistent increase in current liabilities has compounded liquidity pressures, as evidenced by the steadily decreasing cash ratio. The data indicate a trend towards tighter liquidity over the observed periods, which may prompt further analysis into working capital management and financing strategies.