H2O America (HTO)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	190,714	198,389	158,386	134,085	127,331
Total current liabilities	US$ in thousands	261,173	342,974	268,322	203,271	350,795
Current ratio		0.73	0.58	0.59	0.66	0.36

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $190,714K ÷ $261,173K
= 0.73

The current ratio of H2O America has exhibited fluctuations over the period from December 31, 2020, to December 31, 2024. At the end of 2020, the current ratio was notably low at 0.36, indicating that current liabilities significantly exceeded current assets, which could suggest a potential liquidity concern at that time.

In the subsequent year, the ratio improved markedly to 0.66 by the end of 2021, demonstrating a notable enhancement in the company's short-term liquidity position and a closer alignment between current assets and current liabilities. However, this upward trend was not maintained consistently, as the ratio decreased slightly to 0.59 by December 31, 2022.

The ratio remained relatively stable into 2023, maintaining a modest level of 0.58, which still indicates that current assets were less than current liabilities, though the slight decrease from the prior year suggests a marginal tightening in liquidity or asset composition adjustments.

By the end of 2024, the current ratio increased again to 0.73. This improvement reflects a positive development in liquidity, suggesting an increased buffer of current assets relative to current liabilities compared to the previous years. Nonetheless, the ratio remains below 1.0, signifying that current liabilities continue to outperform current assets on the balance sheet, which, in general, may point to ongoing liquidity risks or the need for further working capital management adjustments.

Overall, while the company has experienced some improvement in its current ratio over the analysis period, it persistently remains below the ideal threshold of 1.0, indicating a consistent short-term liquidity challenge. Continued monitoring and potential strategic actions to strengthen the current asset base could be relevant for ensuring sustainable liquidity in the future.