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. Otis Worldwide's current ratio for the quarter that ended in Dec. 2023 was 0.99.
Otis Worldwide has a current ratio of 0.99. It indicates that the company may have difficulty meeting its current obligations. Low values, however, do not indicate a critical problem. If Otis Worldwide has good long-term prospects, it may be able to borrow against those prospects to meet current obligations.
The historical rank and industry rank for Otis Worldwide's Current Ratio or its related term are showing as below:
OTIS'
s Current Ratio Range Over the Past 10 Years
Min: 0.9 Med: 1.02 Max: 1.32
Current: 0.99
During the past 7 years, Otis Worldwide's highest Current Ratio was 1.32. The lowest was 0.90. And the median was 1.02.
OTIS's Current Ratio is ranked worse than 90.91% of 3024
companies
in the Industrial Products industry
Industry Median: 1.98
vs OTIS: 0.99
Otis Worldwide Current Ratio Historical Data
The historical data trend for Otis Worldwide'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 Otis Worldwide's Current Ratio
For the Specialty Industrial Machinery subindustry, Otis Worldwide'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.
Otis Worldwide's Current Ratio Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Otis Worldwide's Current Ratio distribution charts can be found below:
* The bar in red indicates where Otis Worldwide's Current Ratio falls into.
Otis Worldwide 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.
Otis Worldwide's Current Ratio for the fiscal year that ended in Dec. 2023 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.
Otis Worldwide (NYSE:OTIS) 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.
Otis Worldwide Current Ratio Related Terms
Thank you for viewing the detailed overview of Otis Worldwide's Current Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Otis Worldwide (Otis Worldwide) Business Description
Otis is the largest global elevator and escalator supplier by revenue with around 18% global market share. In 1854 Otis' founder and namesake Elisha Graves Otis, invented a safety mechanism that prevented elevators from falling if the hoisting cable failed. The company's product and service lifecycle begins with installations of elevator units in new buildings, later selling maintenance services on the units, and eventually replacement of the units after the average 15- to 20-year useful life of an elevator. As the largest global OEM, Otis has amassed an installed base under service that exceeds 2 million elevators. Its business model is similar to that of its closest competitors Kone, Schindler, and TK Elevator.
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