Dominion Energy Inc (D)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash US$ in thousands 310,000 184,000 153,000 283,000 172,000
Short-term investments US$ in thousands 7,184,000 605,000 18,000 2,934,000
Receivables US$ in thousands
Total current liabilities US$ in thousands 5,637,000 24,476,000 13,450,000 8,673,000 10,843,000
Quick ratio 0.05 0.30 0.06 0.03 0.29

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($310,000K + $—K + $—K) ÷ $5,637,000K
= 0.05

The quick ratio, also known as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets. A quick ratio below 1 indicates potential liquidity issues, as it suggests the company may not have enough liquid assets to meet its current obligations without having to sell inventory.

Looking at Dominion Energy Inc's quick ratio over the years from 2020 to 2024, we observe fluctuations in the ratio. The quick ratio was at a relatively low level of 0.29 in December 31, 2020, indicating that the company had only $0.29 of liquid assets available to cover each dollar of its short-term liabilities. However, in the following years, the quick ratio significantly decreased to 0.03 in 2021, 0.06 in 2022, and 0.05 in 2024, suggesting a worsening liquidity position.

The quick ratio improved notably in December 31, 2023, reaching 0.30. This uptick in the ratio could indicate a temporary strengthening of Dominion Energy Inc's liquidity position during that period. However, the subsequent decrease in the quick ratio suggests a potential deterioration in the company's ability to meet its short-term obligations using its quick assets.

In summary, Dominion Energy Inc's quick ratio has shown volatility over the years, with some periods indicating better liquidity than others. It is essential for investors and stakeholders to track these fluctuations to assess the company's liquidity risk and financial health accurately.