American Water Works (AWK)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 96,000 | 330,000 | 85,000 | 116,000 | 547,000 |
| Short-term investments | US$ in thousands | — | 62,000 | 67,000 | 17,000 | 11,000 |
| Receivables | US$ in thousands | 756,000 | 727,000 | 723,000 | 519,000 | 527,000 |
| Total current liabilities | US$ in thousands | 3,150,000 | 2,151,000 | 2,811,000 | 2,141,000 | 2,881,000 |
| Quick ratio | 0.27 | 0.52 | 0.31 | 0.30 | 0.38 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($96,000K
+ $—K
+ $756,000K)
÷ $3,150,000K
= 0.27
The quick ratio of American Water Works, a key liquidity metric, has exhibited some fluctuations over the past five years. As of December 31, 2020, the quick ratio stood at 0.38, indicating that the company had $0.38 in liquid assets available to cover each dollar of its current liabilities.
However, by the end of 2021, the quick ratio decreased to 0.30, potentially signaling a decreased ability to meet short-term obligations using its most liquid assets. This trend continued into 2022 with a slight improvement to 0.31.
Remarkably, by December 31, 2023, there was a significant improvement in the quick ratio to 0.52, suggesting that the company had increased its ability to cover short-term liabilities.
Unfortunately, this improvement was short-lived as the quick ratio fell to 0.27 by the end of 2024, potentially indicating a decline in liquidity and the ability to meet immediate financial obligations.
Overall, the trend in American Water Works' quick ratio demonstrates varying levels of liquidity over the past five years, with fluctuations that may warrant further investigation into the company's financial health and management of liquid assets.
Peer comparison
Dec 31, 2024