The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Fiat Industrial SpA's current ratio for the quarter that ended in Jun. 2013 was 3.40.
Fiat Industrial SpA has a current ratio of 3.40. It indicates the company may not be efficiently using its current assets or its short-term financing facilities. This may also indicate problems in working capital management.
The historical rank and industry rank for Fiat Industrial SpA's Current Ratio or its related term are showing as below:
LTS:0OAQ's Current Ratio is not ranked *
in the Farm & Heavy Construction Machinery industry.
Industry Median: 1.765 * Ranked among companies with meaningful Current Ratio only.
Fiat Industrial SpA Current Ratio Historical Data
The historical data trend for Fiat Industrial SpA's Current Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Fiat Industrial SpA's Current Ratio
For the Farm & Heavy Construction Machinery subindustry, Fiat Industrial SpA's Current Ratio, along with its competitors' market caps and Current Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Fiat Industrial SpA's Current Ratio Distribution in the Farm & Heavy Construction Machinery Industry
For the Farm & Heavy Construction Machinery industry and Industrials sector, Fiat Industrial SpA's Current Ratio distribution charts can be found below:
* The bar in red indicates where Fiat Industrial SpA's Current Ratio falls into.
Fiat Industrial SpA Current Ratio Calculation
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
Fiat Industrial SpA's Current Ratio for the fiscal year that ended in Dec. 2012 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Fiat Industrial SpA (LTS:0OAQ) Current Ratio Explanation
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Fiat Industrial SpA Current Ratio Related Terms
Thank you for viewing the detailed overview of Fiat Industrial SpA's Current Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Fiat Industrial SpA (LTS:0OAQ) Business Description
Fiat Industrial SpA operates in the capital goods sector. Each of the Group's businesses is a major international player in its respective industry sector: Iveco, CNH-Case New Holland and FPT Industrial. These three sectors design, produce and sell trucks, commercial vehicles, buses, special vehicles (Iveco), tractors, and agricultural and construction equipment (CNH), in addition to engines and transmissions for those vehicles and engines for marine applications (FPT Industrial). Agricultural equipment is sold under the New Holland Agriculture and Case IH and, in the premium segment in Europe, Steyr brands. Construction equipment is sold under the New Holland Construction and Case Construction brands, as well as the Kobelco brand in North America. Iveco designs, manufactures and sells a wide range of light (2.8-6 tons GVW), medium (6-16 tons GVW) and heavy (above 16 tons GVW) commercial vehicles for on-road and off-road use. In addition to its main product offer, the Company also offers after-sales and financing services, in addition to services related to used-vehicles. FPT Industrial is specialized in the design, production and sale of propulsion and transmission systems for on- and off-road trucks and commercial vehicles, as well as engines for marine application and power generation.
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