Allete Inc (ALE)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 32,800 | 71,900 | 36,400 | 45,100 | 44,300 |
| Short-term investments | US$ in thousands | — | — | — | — | 301,000 |
| Total current liabilities | US$ in thousands | 404,200 | 377,600 | 716,200 | 543,400 | 459,600 |
| Cash ratio | 0.08 | 0.19 | 0.05 | 0.08 | 0.75 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($32,800K
+ $—K)
÷ $404,200K
= 0.08
The cash ratio of Allete Inc has been fluctuating over the past five years. As of December 31, 2020, the company had a cash ratio of 0.75, indicating that it had $0.75 in cash and cash equivalents for every $1 of current liabilities. However, by December 31, 2021, the cash ratio had decreased significantly to 0.08, suggesting a sharp decline in the company's ability to cover its short-term obligations with its available cash.
Further deterioration was evident in the following years, with the cash ratio dropping to 0.05 by December 31, 2022. This downward trend reversed slightly in 2023, as the cash ratio improved to 0.19, indicating a better liquidity position compared to the previous year. However, by December 31, 2024, the cash ratio decreased again to 0.08, showing that the company's ability to meet its short-term liabilities with cash had declined once more.
Overall, the fluctuating nature of Allete Inc's cash ratio over the years raises concerns about its liquidity management and ability to maintain adequate cash reserves to cover its short-term obligations. Further analysis of the company's cash flow and working capital management may be necessary to address these fluctuations and ensure a more stable liquidity position in the future.
Peer comparison
Dec 31, 2024