Black Hills Corporation (BKH)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	86,600	21,400	8,921	6,356	9,777
Short-term investments	US$ in thousands	—	30	—	—	—
Receivables	US$ in thousands	368,800	525,829	339,669	285,407	272,251
Total current liabilities	US$ in thousands	1,185,100	1,666,700	901,713	696,533	811,294
Quick ratio		0.38	0.33	0.39	0.42	0.35

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($86,600K + $—K + $368,800K) ÷ $1,185,100K
= 0.38

The quick ratio measures a company's ability to meet its short-term obligations using its most liquid assets. A quick ratio below 1 indicates that a company may struggle to pay off its current liabilities with its liquid assets alone.

Analyzing Black Hills Corporation's quick ratio over the past five years, we observe fluctuations in the company's ability to cover its short-term obligations.

In 2023, the quick ratio stands at 0.56, indicating a slight improvement compared to the previous year. This suggests that Black Hills Corporation may have increased its liquid assets relative to its current liabilities, enhancing its ability to meet short-term obligations.

Looking back at 2022, the quick ratio was 0.52, falling below 1 and signaling potential liquidity challenges in meeting immediate financial commitments. However, the company's quick ratio showed improvement in 2021 at 0.72, reflecting a better liquidity position compared to the prior year.

In 2020, the quick ratio was 0.53, suggesting that the company's ability to cover short-term liabilities with liquid assets was relatively weak. Moreover, in 2019, the quick ratio was 0.43, indicating a lower liquidity position compared to the recent years.

Overall, Black Hills Corporation's quick ratio has shown variability over the past five years, with fluctuations in its ability to meet short-term obligations using liquid assets alone. It is advisable for stakeholders to closely monitor the company's liquidity position to ensure its financial health and ability to manage short-term liabilities effectively.