American States Water Company (AWR)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total current assets	US$ in thousands	205,978	151,294	138,052	157,115	122,456
Total current liabilities	US$ in thousands	166,623	396,522	155,574	118,572	115,998
Current ratio		1.24	0.38	0.89	1.33	1.06

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $205,978K ÷ $166,623K
= 1.24

The current ratio of American States Water Co. has shown fluctuations over the past five years. In 2023, the current ratio improved to 1.24 from 0.38 in 2022, indicating a better ability to meet short-term obligations with current assets. This increase suggests improved liquidity and financial health compared to the previous year.

However, the current ratio was at a relatively low level in 2022, which could have raised concerns about the company's short-term solvency. The significant increase in 2023 implies that the company may have addressed its liquidity issues and strengthened its ability to cover immediate liabilities.

Looking further back, in 2021, the current ratio was 0.89, which was lower than ideal and may have indicated some liquidity challenges. The significant improvement to 1.33 in 2020 suggests that the company successfully enhanced its liquidity position during that period. In 2019, the current ratio was at 1.06, indicating an acceptable level of liquidity to cover short-term obligations.

Overall, the trend in American States Water Co.'s current ratio demonstrates fluctuations over the years, with varying levels of liquidity. The recent increase in the current ratio is a positive sign for the company's short-term financial health and ability to meet its current liabilities.