California Water Service Group (CWT)

Quick ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash	US$ in thousands	39,591	34,735	55,595	52,286	62,100	90,458	61,749	68,379	78,380	140,368	66,483	84,387	44,555	113,312	114,388	140,406	42,653	51,257	54,560	60,234
Short-term investments	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	917,901	—	—	—	—	—	—
Receivables	US$ in thousands	112,779	145,505	124,813	96,661	109,151	145,152	127,003	103,294	111,997	142,384	124,660	93,067	98,425	114,700	99,291	78,306	119,349	105,163	93,895	71,687
Total current liabilities	US$ in thousands	430,339	381,140	362,657	350,304	294,650	322,547	286,083	281,817	271,937	360,938	362,379	655,466	588,706	603,823	577,552	513,127	358,721	333,944	331,389	384,043
Quick ratio		0.35	0.47	0.50	0.43	0.58	0.73	0.66	0.61	0.70	0.78	0.53	0.27	0.24	1.90	0.37	0.43	0.45	0.47	0.45	0.34

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($39,591K + $—K + $112,779K) ÷ $430,339K
= 0.35

The quick ratio of California Water Service Group has varied over the past eight quarters, ranging from 0.55 to 0.95. Generally, a quick ratio below 1 indicates potential liquidity concerns as it suggests the company may have difficulty meeting its short-term obligations with its most liquid assets.

The gradual decrease in the quick ratio from 0.95 in Q3 2022 to 0.55 in Q4 2023 may indicate a declining ability to cover immediate liabilities with current assets. It is worth noting that a quick ratio of 0.55 in Q4 2023 is the lowest in the period under review, which could signal increased liquidity risk.

Management should closely monitor the trend in the quick ratio to ensure that the company maintains a healthy level of liquidity to meet its short-term commitments effectively. Potential strategies to improve the quick ratio could include increasing cash reserves, reducing short-term liabilities, or improving the efficiency of accounts receivable management.