H2O America (HTO)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	11,114	9,723	12,344	10,908	5,269
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	142,538	126,284	110,454	104,768	103,092
Total current liabilities	US$ in thousands	261,173	342,974	268,322	203,271	350,795
Quick ratio		0.59	0.40	0.46	0.57	0.31

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($11,114K + $—K + $142,538K) ÷ $261,173K
= 0.59

The quick ratio of H2O America over the analyzed period demonstrates some variability, with values ranging from 0.31 at the end of 2020 to a peak of 0.59 at the end of 2024. Initially, the quick ratio stood at 0.31 in December 2020, indicating that the company's most liquid assets (excluding inventories) covered approximately 31% of its current liabilities, reflecting a relatively conservative liquidity position.

By December 2021, the quick ratio increased significantly to 0.57, suggesting an improvement in liquid asset coverage and potentially enhanced short-term liquidity management. Subsequently, the ratio experienced a slight decline to 0.46 in 2022, which, while lower than the previous year, still remained substantially above the 2020 level, indicating a maintained but slightly reduced liquidity cushion. In 2023, the ratio further decreased to 0.40, approaching the levels observed in 2020, which could suggest a tightening of liquidity or increased current liabilities relative to liquid assets.

However, by December 2024, the quick ratio improved again to 0.59, surpassing all previous years' figures and indicating a strengthening of the company's liquidity position. This upward trend at the end of the period may reflect favorable adjustments in liquid assets, reduction of short-term liabilities, or both.

Overall, the year-by-year fluctuations of the quick ratio suggest that H2O America's liquidity management has experienced periods of strengthening and slight weakening over the period, with a notable recovery in 2024. The ratio remains below 1 across all years, indicating that the company's liquid assets do not cover all current liabilities, which is typical for many firms but warrants ongoing scrutiny of liquidity to ensure financial stability.