American Water Works (AWK)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total current assets	US$ in thousands	1,389,000	1,250,000	1,554,000	1,906,000	1,285,000
Total current liabilities	US$ in thousands	2,151,000	2,811,000	2,141,000	2,881,000	2,045,000
Current ratio		0.65	0.44	0.73	0.66	0.63

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $1,389,000K ÷ $2,151,000K
= 0.65

The current ratio of American Water Works Co. Inc. has shown fluctuations over the past five years, with values ranging from 0.44 to 0.73. The ratio measures the company's ability to cover its short-term obligations with its current assets. A current ratio below 1 indicates that the company may have difficulty meeting its short-term liabilities using its current assets alone.

In 2023, the current ratio improved to 0.65 compared to the previous year's ratio of 0.44, suggesting a better ability to cover short-term obligations. However, the ratio remains below 1, indicating that the company still may face challenges in meeting its current liabilities.

Compared to 2021 and 2020, where the current ratio was 0.73 and 0.66 respectively, the current ratio in 2023 is relatively lower. This downward trend may raise concerns about the company's liquidity position and its ability to manage short-term obligations effectively.

Looking back to 2019, the current ratio was 0.63, which is close to the current ratio in 2023. This indicates that the company's liquidity position has not significantly improved over the past five years.

Overall, while there was a slight improvement in the current ratio in 2023, the ratio remains below 1, indicating a potential risk in meeting short-term obligations with current assets alone. The company may need to focus on managing its liquidity effectively to ensure financial stability in the short term.