Avista Corporation (AVA)

The current ratio of Avista Corporation has been fluctuating over the past five years, ranging from 0.48 to 0.85. This indicates that the company may have faced some challenges in meeting its short-term obligations, as a current ratio below 1 suggests that current assets may not be sufficient to cover current liabilities. However, the current ratio improved in the most recent year, reaching 0.85, which may indicate a strengthening ability to meet short-term obligations.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also been relatively low, ranging from 0.02 to 0.05 over the same period. This suggests that Avista Corporation's ability to cover immediate liabilities with its most liquid assets is limited. Despite some fluctuations, the quick ratio remained low in the most recent year at 0.04, indicating a continued challenge in meeting short-term obligations without relying on inventory.

The cash ratio, which focuses solely on the availability of cash and cash equivalents to cover current liabilities, mirrors the trend seen in the quick ratio, ranging from 0.02 to 0.05. This indicates that Avista Corporation may have faced constraints in utilizing cash reserves to meet short-term obligations effectively. The cash ratio remained at 0.04 in the most recent year, suggesting that the company continues to have a limited ability to cover current liabilities solely with cash on hand.

Overall, Avista Corporation's liquidity ratios indicate a consistent challenge in meeting short-term obligations over the past five years, with improvements noted in the most recent year. The company may need to closely monitor its liquidity position and consider strategies to enhance its ability to meet immediate financial obligations.

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Additional liquidity measure

The cash conversion cycle of Avista Corporation has fluctuated over the past five years. As of December 31, 2020, the company's cash conversion cycle was 61.78 days, slightly increasing to 62.21 days by December 31, 2021. However, there was a notable improvement by December 31, 2022, with the cycle decreasing to 53.41 days, indicating a more efficient management of cash flow.

Subsequently, there was a significant increase in the cash conversion cycle to 83.14 days by December 31, 2023, followed by a further rise to 88.28 days by December 31, 2024. These increases suggest potential challenges in managing working capital efficiently. Overall, Avista Corporation needs to focus on optimizing its cash conversion cycle to ensure better management of cash inflows and outflows to improve its financial efficiency.