Avista Corporation (AVA)

Liquidity ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Current ratio	0.85	0.94	0.97	1.08	0.75	0.68	0.75	0.93	0.48	0.45	0.41	0.71	0.68	0.63	0.54	0.48	0.57	0.62	0.52	0.64
Quick ratio	0.66	0.56	0.61	0.67	0.55	0.46	0.60	0.82	0.46	0.34	0.30	0.57	0.71	0.42	0.36	0.31	0.57	0.31	0.26	0.33
Cash ratio	0.24	0.28	0.31	0.27	0.17	0.19	0.24	0.46	0.12	0.13	0.12	0.17	0.15	0.18	0.18	0.03	0.12	0.04	0.03	0.03

Avista Corp.'s liquidity ratios have shown fluctuations over the past eight quarters.

The current ratio, which measures the company's ability to pay its short-term obligations using its current assets, has been somewhat volatile, ranging from a low of 0.68 in Q3 2022 to a high of 1.08 in Q1 2023. However, the current ratio has generally stayed below the ideal value of 1, indicating potential liquidity challenges.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also exhibited variability. It reached a low point of 0.50 in Q3 2022 and peaked at 0.92 in Q1 2023. Like the current ratio, the quick ratio suggests that Avista Corp. may struggle to meet its short-term obligations without relying on inventory.

The cash ratio, which is the most conservative liquidity metric as it only considers cash and cash equivalents, has also fluctuated. While it increased from 0.22 in Q3 2022 to 0.51 in Q1 2023, it remains relatively low compared to the current and quick ratios, indicating a limited ability to cover immediate liabilities solely with cash on hand.

Overall, Avista Corp.'s liquidity ratios suggest that the company may face challenges in meeting its short-term financial obligations without needing to rely on additional sources of liquidity. Management should closely monitor these ratios to ensure sufficient liquidity to support ongoing operations and financial stability.

Additional liquidity measure

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash conversion cycle	days	77.25	57.92	68.02	51.78	78.58	614.53	-777.28	-1,826.01	-2,435.26	-378.54	-529.67	-743.88	-956.33	-213.45	-693.51	-485.90	-319.29	-233.18	-108.69	-462.91

The cash conversion cycle of Avista Corp. shows substantial fluctuations over the past eight quarters. The cycle, which represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales, has ranged from a low of 13.88 days in Q4 2022 to a high of 59.95 days in Q4 2023.

A shorter cash conversion cycle indicates that Avista Corp. is efficiently managing its working capital and converting its assets into cash quicker. Conversely, a longer cycle suggests potential inefficiencies in managing inventory, accounts receivable, and accounts payable.

The trend in recent quarters shows an upward movement in the cash conversion cycle, potentially indicating a slowdown in cash generation from operating activities. This may be a cause for concern as it could indicate challenges in managing working capital effectively, leading to a longer cash conversion cycle.

Overall, a detailed analysis of the components contributing to the cash conversion cycle, such as inventory turnover, accounts receivable collection period, and accounts payable payment period, would provide more insights into Avista Corp.'s liquidity management and operational efficiency.