Atmos Energy Corporation (ATO)

Current ratio

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Total current assets	US$ in thousands	885,768	3,047,690	2,838,720	471,258	458,031
Total current liabilities	US$ in thousands	1,352,590	3,602,600	3,510,360	782,401	1,209,440
Current ratio		0.65	0.85	0.81	0.60	0.38

September 30, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $885,768K ÷ $1,352,590K
= 0.65

The current ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations with its short-term assets. A higher current ratio indicates a stronger ability to cover short-term liabilities.

Looking at the trend of Atmos Energy Corp.'s current ratio over the past five years, we can observe fluctuations in the ratio. In 2019, the current ratio was 0.38, indicating that the company had $0.38 in current assets for every $1 of current liabilities. This figure improved significantly in 2020 to 0.60, suggesting a better ability to cover short-term obligations.

However, the current ratio decreased in 2021 to 0.81 before dropping further to 0.85 in 2022 and then to 0.65 in 2023. The decreasing trend in the current ratio over the past two years may raise concerns about the company's short-term liquidity position.

A current ratio below 1.0 can indicate potential liquidity issues, as it implies that the company may not have enough current assets to cover its current liabilities. A low current ratio can also signify a higher risk of defaulting on short-term obligations.

It is important to note that while a low current ratio may raise concerns, it is essential to consider the nature of the company's operations and industry standards. For example, capital-intensive industries may have lower current ratios due to the nature of their assets and liabilities.

In summary, Atmos Energy Corp.'s current ratio has shown fluctuations over the past five years, with a decreasing trend in the last two years. This trend warrants further analysis to assess the company's ability to meet its short-term obligations and manage its liquidity effectively.