Allete Inc (ALE)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	435,200	468,100	718,000	291,300	254,900
Total current liabilities	US$ in thousands	404,200	377,600	716,200	543,400	459,600
Current ratio		1.08	1.24	1.00	0.54	0.55

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $435,200K ÷ $404,200K
= 1.08

Allete Inc's current ratio is an important indicator of the company's short-term liquidity and ability to meet its immediate financial obligations. The current ratio measures the company's ability to cover its short-term liabilities with its current assets.

Based on the provided data, we observe the following trend in Allete Inc's current ratio over the past five years:

- As of December 31, 2020, the current ratio was 0.55, indicating that the company may have had difficulty meeting its short-term obligations with its current assets.
- The ratio slightly decreased to 0.54 by December 31, 2021, suggesting a further strain on the company's short-term liquidity position.
- By December 31, 2022, the current ratio improved significantly to 1.00, reaching the threshold of 1 which is generally considered healthy for a company.
- The ratio continued to strengthen, reaching 1.24 by December 31, 2023, indicating an even better ability to cover its short-term liabilities with current assets.
- However, by December 31, 2024, the current ratio declined to 1.08, showing a slight decrease in liquidity compared to the previous year.

Overall, the current ratio of Allete Inc has shown variability over the past five years. While the company improved its liquidity position in 2022 and 2023, the slight decrease in 2024 suggests a potential need for the company to carefully manage its current assets and liabilities to ensure it maintains a healthy liquidity position in the future.