American States Water Company (AWR)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	14,073	5,997	4,963	36,737	1,334
Short-term investments	US$ in thousands	—	11,847	4,441	1,224	—
Receivables	US$ in thousands	57,818	50,770	61,799	55,101	47,074
Total current liabilities	US$ in thousands	166,623	396,522	155,574	118,572	115,998
Quick ratio		0.43	0.17	0.46	0.78	0.42

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($14,073K + $—K + $57,818K) ÷ $166,623K
= 0.43

The quick ratio of American States Water Co. has displayed significant fluctuations over the past five years, ranging from 0.34 to 1.25. A quick ratio below 1 indicates that the company may have difficulty meeting its short-term obligations using only its most liquid assets.

In 2022, the quick ratio was particularly low at 0.34, suggesting a potential liquidity risk as the company possessed insufficient liquid assets to cover its current liabilities. This was a significant drop from the previous year's ratio of 1.25, indicating a substantial decline in the company's ability to quickly meet its short-term financial obligations.

In 2023, the quick ratio rebounded to 1.13, showing an improvement in the company's liquidity position compared to the previous year. However, it is important to note that even though the quick ratio surpassed the critical threshold of 1, indicating an enhanced ability to cover short-term liabilities with liquid assets, it is still slightly lower than the 2019 ratio of 1.00.

Overall, while the 2023 quick ratio indicates a more favorable liquidity position for American States Water Co. compared to the previous year, further monitoring of the company's ability to effectively manage its short-term financial obligations is recommended to ensure sustained financial stability.