Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
United Rentals Inc., liquidity ratios (quarterly data)
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
- Current Ratio
-
The current ratio demonstrates a general improvement over the four-year period, starting below 1.0 in early 2019 and rising above 1.0 in selected quarters of 2020 and consistently maintaining above 1.0 by the end of 2022. This suggests an enhanced ability to cover short-term liabilities with current assets. The ratio peaked in the first quarter of 2020 at 1.11 and again in the final quarter of 2022 at 1.11, indicating periods of increased liquidity. However, fluctuations were observed between quarters, with dips below 1.0 in the mid-2019 and mid-2021 periods, reflecting occasional tightening of liquidity.
- Quick Ratio
-
The quick ratio follows a similar pattern to the current ratio but with generally lower values, as expected due to the exclusion of inventory from current assets. It rose substantially in the first quarter of 2020 reaching 0.96, suggesting improved quick liquidity at that time. Subsequent quarters saw some volatility, with decreases notably in mid-2019 and mid-2021, and a recovery trend towards the end of 2022. The quick ratio fluctuates mostly between 0.6 and 0.9, indicating moderate liquidity when considering only the most liquid assets.
- Cash Ratio
-
The cash ratio saw the most pronounced variability during the period, starting very low around 0.02 in early 2019 and spiking sharply to 0.26 in the first quarter of 2020. After this peak, it declined gradually but remained higher than the initial levels, fluctuating between 0.03 and 0.15 for the majority of the time. This pattern indicates sporadic cash reserves accumulation, peaking at significant points such as early 2020, possibly as a response to financial strategy or liquidity needs, before settling to modest levels by the end of 2022.
Current Ratio
United Rentals Inc., current ratio calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Current assets | 2,723) | 2,327) | 2,164) | 2,010) | 2,151) | 2,200) | 2,154) | 2,004) | 2,017) | 1,728) | 1,622) | 2,214) | 1,842) | 1,881) | 1,840) | 1,720) | |||||
| Current liabilities | 2,445) | 2,264) | 2,023) | 2,597) | 2,603) | 2,752) | 2,544) | 1,841) | 1,890) | 1,916) | 1,921) | 1,996) | 2,198) | 2,643) | 2,535) | 2,238) | |||||
| Liquidity Ratio | |||||||||||||||||||||
| Current ratio1 | 1.11 | 1.03 | 1.07 | 0.77 | 0.83 | 0.80 | 0.85 | 1.09 | 1.07 | 0.90 | 0.84 | 1.11 | 0.84 | 0.71 | 0.73 | 0.77 | |||||
| Benchmarks | |||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||
| Boeing Co. | 1.22 | 1.22 | 1.25 | 1.30 | 1.33 | 1.36 | 1.35 | 1.33 | — | — | — | — | — | — | — | — | |||||
| Caterpillar Inc. | 1.39 | 1.41 | 1.45 | 1.44 | 1.46 | 1.61 | 1.56 | 1.60 | — | — | — | — | — | — | — | — | |||||
| Eaton Corp. plc | 1.38 | 1.28 | 0.97 | 0.99 | 1.04 | 1.27 | 1.10 | 1.51 | — | — | — | — | — | — | — | — | |||||
| GE Aerospace | 1.16 | 1.10 | 1.13 | 1.19 | 1.28 | 1.80 | 1.81 | 1.96 | — | — | — | — | — | — | — | — | |||||
| Honeywell International Inc. | 1.25 | 1.24 | 1.20 | 1.21 | 1.30 | 1.29 | 1.41 | 1.43 | — | — | — | — | — | — | — | — | |||||
| Lockheed Martin Corp. | 1.32 | 1.28 | 1.27 | 1.27 | 1.42 | 1.42 | 1.36 | 1.38 | — | — | — | — | — | — | — | — | |||||
| RTX Corp. | 1.09 | 1.09 | 1.10 | 1.16 | 1.19 | 1.23 | 1.17 | 1.17 | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q4 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= 2,723 ÷ 2,445 = 1.11
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibit a fluctuating trend over the observed periods, starting at $1,720 million in the first quarter of 2019 and showing an initial increase to $2,214 million by the first quarter of 2020. A decline follows in mid-2020, with a low point of $1,622 million in the second quarter of 2020, after which current assets trend upward steadily, reaching $2,723 million by the last quarter of 2022. This suggests a recovery and growth in short-term resources after the mid-2020 dip.
- Current Liabilities
- Current liabilities start at $2,238 million in the first quarter of 2019 and generally decrease throughout 2019 and the early part of 2020, hitting a low of $1,890 million by the end of 2020. However, liabilities rise sharply in 2021, peaking at $2,752 million in the third quarter of 2021. Following this, there is a moderate decline in 2022, with liabilities standing at $2,445 million by the end of the fourth quarter. The pattern indicates varying levels of short-term obligations with a pronounced increase in 2021 before a slight normalization.
- Current Ratio
- The current ratio, which measures the company's ability to cover its short-term liabilities with short-term assets, starts below 1.0 at 0.77 in early 2019 and declines to a low of 0.71 by the third quarter of 2019. It improves substantially in the first quarter of 2020, reaching 1.11, showing an increased liquidity position. Subsequently, the ratio declines again through 2020 and especially during 2021, with a low around 0.8, before improving again to above 1.0 in the latter half of 2022, ending at 1.11. This indicates fluctuations between periods of constrained liquidity and relative financial stability, with recent quarters reflecting improved short-term financial health.
Quick Ratio
United Rentals Inc., quick ratio calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Cash and cash equivalents | 106) | 76) | 68) | 101) | 144) | 320) | 336) | 278) | 202) | 174) | 127) | 513) | 52) | 60) | 75) | 52) | |||||
| Accounts receivable, net | 2,004) | 1,934) | 1,744) | 1,607) | 1,677) | 1,602) | 1,400) | 1,254) | 1,315) | 1,324) | 1,226) | 1,413) | 1,530) | 1,595) | 1,525) | 1,487) | |||||
| Total quick assets | 2,110) | 2,010) | 1,812) | 1,708) | 1,821) | 1,922) | 1,736) | 1,532) | 1,517) | 1,498) | 1,353) | 1,926) | 1,582) | 1,655) | 1,600) | 1,539) | |||||
| Current liabilities | 2,445) | 2,264) | 2,023) | 2,597) | 2,603) | 2,752) | 2,544) | 1,841) | 1,890) | 1,916) | 1,921) | 1,996) | 2,198) | 2,643) | 2,535) | 2,238) | |||||
| Liquidity Ratio | |||||||||||||||||||||
| Quick ratio1 | 0.86 | 0.89 | 0.90 | 0.66 | 0.70 | 0.70 | 0.68 | 0.83 | 0.80 | 0.78 | 0.70 | 0.96 | 0.72 | 0.63 | 0.63 | 0.69 | |||||
| Benchmarks | |||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||
| Boeing Co. | 0.32 | 0.29 | 0.28 | 0.29 | 0.34 | 0.38 | 0.38 | 0.37 | — | — | — | — | — | — | — | — | |||||
| Caterpillar Inc. | 0.79 | 0.78 | 0.81 | 0.84 | 0.89 | 1.00 | 1.02 | 1.08 | — | — | — | — | — | — | — | — | |||||
| Eaton Corp. plc | 0.73 | 0.65 | 0.50 | 0.51 | 0.54 | 0.69 | 0.44 | 0.66 | — | — | — | — | — | — | — | — | |||||
| GE Aerospace | 0.81 | 0.73 | 0.75 | 0.82 | 0.93 | 0.90 | 0.90 | 1.06 | — | — | — | — | — | — | — | — | |||||
| Honeywell International Inc. | 0.88 | 0.85 | 0.82 | 0.84 | 0.94 | 0.96 | 1.06 | 1.08 | — | — | — | — | — | — | — | — | |||||
| Lockheed Martin Corp. | 1.09 | 1.06 | 1.03 | 1.03 | 1.15 | 1.18 | 1.10 | 1.09 | — | — | — | — | — | — | — | — | |||||
| RTX Corp. | 0.69 | 0.70 | 0.71 | 0.76 | 0.81 | 0.82 | 0.79 | 0.79 | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q4 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 2,110 ÷ 2,445 = 0.86
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends related to the company's liquidity position over the observed periods.
- Total Quick Assets
- The total quick assets exhibited fluctuations throughout the quarters. Starting at approximately 1,539 million USD in the first quarter of 2019, the figure increased steadily reaching peaks around the first quarter of 2020, followed by a notable decline in the second quarter of 2020. Subsequently, the quick assets showed a recovery trend, culminating in an increase to about 2,110 million USD by the final quarter of 2022. This pattern suggests periods of asset accumulation as well as occasional reductions, indicating dynamic management of liquid assets.
- Current Liabilities
- Current liabilities demonstrated volatility with notable shifts in certain quarters. Initially rising from roughly 2,238 million USD in the first quarter of 2019 to a peak exceeding 2,643 million USD by the third quarter of 2019, liabilities then decreased progressively through 2020, reaching a low near 1,890 million USD by the end of that year. However, in 2021 the liabilities surged again, reaching levels above 2,700 million USD mid-year before settling around 2,445 million USD at the end of 2022. The fluctuations in liabilities may reflect changes in short-term borrowing or accounts payable management.
- Quick Ratio
- The quick ratio, an indicator of short-term liquidity, displayed variability across the quarters. It started below 0.7 during early 2019, improved significantly in the first quarter of 2020 to nearly 0.96, indicative of a stronger immediate liquidity position. However, this was followed by a decline to the range of approximately 0.68 to 0.7 through 2021, implying reduced coverage of current liabilities by quick assets. The ratio improved once more in 2022, nearing 0.9 in the mid-year quarters and slightly decreasing by year-end to 0.86. This trend points to generally cautious liquidity management, with alternating periods of strength and constraint.
Overall, the liquidity profile experienced considerable variation, with cycles of asset growth and liability adjustment impacting the quick ratio. The company appeared to balance between maintaining sufficient liquid resources and managing its short-term obligations, responding to changing financial environments over the reported timeframe.
Cash Ratio
United Rentals Inc., cash ratio calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Cash and cash equivalents | 106) | 76) | 68) | 101) | 144) | 320) | 336) | 278) | 202) | 174) | 127) | 513) | 52) | 60) | 75) | 52) | |||||
| Total cash assets | 106) | 76) | 68) | 101) | 144) | 320) | 336) | 278) | 202) | 174) | 127) | 513) | 52) | 60) | 75) | 52) | |||||
| Current liabilities | 2,445) | 2,264) | 2,023) | 2,597) | 2,603) | 2,752) | 2,544) | 1,841) | 1,890) | 1,916) | 1,921) | 1,996) | 2,198) | 2,643) | 2,535) | 2,238) | |||||
| Liquidity Ratio | |||||||||||||||||||||
| Cash ratio1 | 0.04 | 0.03 | 0.03 | 0.04 | 0.06 | 0.12 | 0.13 | 0.15 | 0.11 | 0.09 | 0.07 | 0.26 | 0.02 | 0.02 | 0.03 | 0.02 | |||||
| Benchmarks | |||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||
| Boeing Co. | 0.19 | 0.16 | 0.14 | 0.15 | 0.20 | 0.23 | 0.24 | 0.24 | — | — | — | — | — | — | — | — | |||||
| Caterpillar Inc. | 0.22 | 0.21 | 0.21 | 0.22 | 0.31 | 0.36 | 0.39 | 0.43 | — | — | — | — | — | — | — | — | |||||
| Eaton Corp. plc | 0.09 | 0.08 | 0.07 | 0.06 | 0.08 | 0.11 | 0.06 | 0.20 | — | — | — | — | — | — | — | — | |||||
| GE Aerospace | 0.44 | 0.35 | 0.37 | 0.44 | 0.54 | 0.52 | 0.50 | 0.67 | — | — | — | — | — | — | — | — | |||||
| Honeywell International Inc. | 0.51 | 0.44 | 0.43 | 0.49 | 0.59 | 0.60 | 0.68 | 0.71 | — | — | — | — | — | — | — | — | |||||
| Lockheed Martin Corp. | 0.16 | 0.15 | 0.11 | 0.12 | 0.26 | 0.18 | 0.18 | 0.20 | — | — | — | — | — | — | — | — | |||||
| RTX Corp. | 0.16 | 0.14 | 0.13 | 0.17 | 0.22 | 0.22 | 0.23 | 0.24 | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q4 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 106 ÷ 2,445 = 0.04
2 Click competitor name to see calculations.
The analysis reveals notable fluctuations in the liquidity position of the company over the examined periods. Total cash assets exhibited a significant surge starting in the first quarter of 2020, reaching a peak in March 2020, which is substantially higher than the previous quarters. Following this peak, cash assets declined sharply in the subsequent quarters of 2020 and then demonstrated moderate variability, with generally lower levels observed in 2022 relative to the peak period.
Current liabilities generally showed a downward trend from the first quarter of 2019 through the end of 2020, indicating a reduction in short-term financial obligations during this period. However, there was a marked increase in current liabilities in the mid-2021 quarters, followed by some fluctuations but remaining at elevated levels through 2022 compared to the earlier years.
The cash ratio, which measures the company’s ability to cover current liabilities with cash and cash equivalents, correspondingly reflected these changes. Initially very low through 2019 (around 0.02 to 0.03), the ratio jumped significantly in early 2020 aligned with the increase in cash assets and drop in liabilities. This higher liquidity ratio declined again during late 2020 and 2021, indicating a reduced buffer of immediate liquidity. In 2022, the cash ratio remained relatively low, fluctuating between 0.03 and 0.04, revealing a leaner liquidity position despite stronger current liabilities.
Overall, the data suggests the company experienced a temporary strengthening of cash reserves and liquidity in early 2020, potentially as a response to external conditions requiring greater liquidity. However, this position was not sustained, with cash assets and liquidity ratios declining in subsequent periods while current liabilities increased notably. The trend points to higher short-term financial obligations alongside a more constrained liquid asset base in recent quarters.
- Total Cash Assets
- Experienced a sharp increase in early 2020, peaking in March 2020, followed by a decline and moderate volatility through 2022.
- Current Liabilities
- Showed a decreasing trend through 2020, then increased significantly mid-2021, maintaining elevated levels in 2022.
- Cash Ratio
- Correlated with cash assets and liabilities, rising sharply in early 2020, then declining and stabilizing at a lower level by 2022.