Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Statement of Comprehensive Income
- Cash Flow Statement
- Common-Size Income Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
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- Price to Sales (P/S) since 2005
- Analysis of Debt
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Liquidity Ratios (Summary)
Sherwin-Williams Co., 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 exhibits a declining trend over the examined periods. Starting from a value of 1.00 at the end of 2020, it decreased to 0.88 in 2021, slightly recovered to 0.99 in 2022, but then fell again to 0.83 in 2023 and further dropped to 0.79 by the end of 2024. This indicates a gradual reduction in the company's ability to cover its short-term liabilities with its short-term assets, suggesting tightening liquidity conditions.
- Quick Ratio
- The quick ratio follows a similar downward trajectory. It began at 0.50 in 2020 and declined to 0.44 in 2021. A marginal increase to 0.46 occurred in 2022, but this was followed by decreases to 0.41 in 2023 and 0.38 in 2024. The decreasing quick ratio suggests a diminishing capacity to meet immediate liabilities without relying on inventory sales, which may point to more conservative liquidity management or operational pressures.
- Cash Ratio
- The cash ratio remains consistently low throughout the period, ranging between 0.03 and 0.05. It starts at 0.05 in 2020, decreases to 0.03 in 2021 and 2022, slightly rises to 0.04 in 2023, and returns to 0.03 in 2024. This indicates limited cash and cash equivalents relative to current liabilities, reflecting a restricted buffer of liquid assets for meeting short-term obligations.
Current Ratio
Sherwin-Williams Co., 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 thousands) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Linde plc | ||||||
| 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
- Current assets displayed an overall growth trend from 2020 to 2024, increasing from approximately $4.59 billion to about $5.40 billion. A peak was observed in 2022 at nearly $5.91 billion, followed by a decline in the subsequent periods, ending slightly lower than in 2021.
- Current Liabilities
- Current liabilities increased consistently over the five-year period at a notable pace, rising from approximately $4.59 billion in 2020 to roughly $6.81 billion in 2024. The growth rate of current liabilities outpaced that of current assets, with the most pronounced increases seen after 2021.
- Current Ratio
- The current ratio exhibited a declining trend throughout the period, starting at a neutral level of 1.00 in 2020. The ratio dipped below 1 in 2021 to 0.88, rebounded slightly close to parity in 2022 at 0.99, and then decreased further in 2023 and 2024 to 0.83 and 0.79, respectively. This ongoing decline suggests a weakening short-term liquidity position over time.
Quick Ratio
Sherwin-Williams Co., quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | ||||||
| Accounts receivable, net | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Linde plc | ||||||
| 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.
- Total Quick Assets
- The total quick assets showed a consistent upward trend from 2020 to 2022, increasing from 2,304,700 thousand US dollars to a peak of 2,762,400 thousand US dollars. However, after 2022, a gradual decline is observed with totals decreasing to 2,744,700 thousand US dollars in 2023 and further to 2,599,200 thousand US dollars by the end of 2024.
- Current Liabilities
- Current liabilities exhibited a continuous increase throughout the observed period. Starting at 4,594,400 thousand US dollars in 2020, these liabilities rose steadily to reach 6,808,700 thousand US dollars in 2024, marking a significant growth in short-term obligations over five years.
- Quick Ratio
- The quick ratio revealed a declining trend across the analyzed periods. Beginning at 0.5 in 2020, it decreased to 0.44 in 2021, experienced a slight recovery to 0.46 in 2022, but then declined again to 0.41 in 2023 and continued to fall to 0.38 in 2024. This trend indicates a diminishing ability to cover current liabilities with the most liquid assets.
- Overall Analysis
- Although total quick assets initially increased, the subsequent decrease coupled with a persistent rise in current liabilities has led to a deterioration in the quick ratio over the period. This suggests a possible weakening in short-term liquidity and financial flexibility, pointing towards increased reliance on current liabilities relative to readily available assets.
Cash Ratio
Sherwin-Williams Co., 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 thousands) | ||||||
| Cash and cash equivalents | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Linde plc | ||||||
| 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 exhibited a fluctuating trend over the observed period. Starting at 226,600 thousand US dollars at the end of 2020, the amount decreased significantly to 165,700 thousand in 2021. Subsequently, there was a recovery to 198,800 thousand in 2022, followed by a marked increase reaching 276,800 thousand in 2023. However, this upward trend was not sustained, as total cash assets declined again to 210,400 thousand in 2024.
- Current Liabilities
- Current liabilities demonstrated a consistent and notable upward trajectory throughout the five-year period. Beginning at 4,594,400 thousand US dollars at the end of 2020, liabilities increased steadily each year, reaching 5,719,500 thousand in 2021, 5,960,700 thousand in 2022, 6,626,900 thousand in 2023, and attained 6,808,700 thousand by the end of 2024. This continuous rise indicates growing short-term obligations.
- Cash Ratio
- The cash ratio, reflecting the proportion of cash and cash equivalents to current liabilities, remained relatively low and stable, varying between 0.03 and 0.05. It started at 0.05 at the close of 2020, dropped to 0.03 in 2021, maintained at 0.03 in 2022, increased slightly to 0.04 in 2023, and declined back to 0.03 in 2024. This suggests a consistently limited liquidity buffer relative to current liabilities over the period.