Atmos Energy Corporation (ATO)

Cash ratio

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cash and cash equivalents	US$ in thousands	307,340	15,404	51,554	116,723	20,808
Short-term investments	US$ in thousands	—	-381,593	—	—	—
Total current liabilities	US$ in thousands	1,205,880	1,352,590	3,602,600	3,510,360	782,401
Cash ratio		0.25	-0.27	0.01	0.03	0.03

September 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($307,340K + $—K) ÷ $1,205,880K
= 0.25

The cash ratio provides insight into a company's ability to cover its short-term liabilities using its available cash and cash equivalents. A cash ratio of 0.25 as of September 30, 2024, indicates that Atmos Energy Corporation had $0.25 in cash and cash equivalents for every $1 of current liabilities, suggesting a significant improvement in liquidity compared to the negative cash ratio in the previous year.

It is important to note that a negative cash ratio, such as the one reported in September 2023, may imply a shortage of cash to cover short-term obligations, potentially indicating financial stress or a need to manage cash more efficiently.

The slight increase in the cash ratio from 0.01 in September 2022 to 0.03 in September 2021 and 2020 reflects a gradual improvement in the company's liquidity position over the years. However, a cash ratio of 0.03 still indicates that Atmos Energy Corporation has limited cash resources relative to its current liabilities.

Overall, while the cash ratio of 0.25 in September 2024 shows a positive trend towards improved liquidity, investors and analysts should continue to monitor Atmos Energy Corporation's cash management and liquidity position to ensure the company can meet its short-term obligations effectively.