IDACORP Inc (IDA)

Liquidity ratios provide valuable insights into a company's ability to meet its short-term obligations. In the case of Idacorp, Inc., we can observe fluctuations in its current, quick, and cash ratios over the past five years.

1. Current Ratio:
The current ratio indicates a company's ability to cover its current liabilities with its current assets. Idacorp's current ratio has fluctuated over the years, ranging from 1.26 in 2022 to 2.23 in 2020. The ratio seems to have improved in 2023 compared to the previous year, standing at 1.58. A current ratio above 1 indicates that the company has more current assets than current liabilities, suggesting a healthy liquidity position.

2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Idacorp's quick ratio has also varied over the years, showing a similar trend to the current ratio. The company's quick ratio ranged from 1.07 in 2022 to 1.90 in 2020. In 2023, the quick ratio improved to 1.33 compared to the previous year. A quick ratio above 1 indicates that the company can meet its short-term obligations without relying on selling inventory.

3. Cash Ratio:
The cash ratio measures a company's ability to cover its current liabilities with its cash and cash equivalents. Idacorp's cash ratio has fluctuated over the years, ranging from 0.59 in 2022 to 1.34 in 2020. The cash ratio improved significantly in 2023, standing at 0.91. A cash ratio above 1 implies that the company holds more cash than current liabilities, indicating a strong ability to meet short-term obligations.

Overall, Idacorp's liquidity ratios suggest that the company has generally maintained a solid liquidity position over the years, with improvements observed in 2023 compared to the previous year. However, investors and stakeholders should continue monitoring these ratios to ensure the company's ability to meet its short-term financial commitments remains robust.

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Additional liquidity measure

The cash conversion cycle of Idacorp, Inc. has fluctuated over the past five years. In 2023, the company improved its cash conversion cycle significantly to -52.56 days, indicating that it converted inventory and receivables into cash more efficiently compared to the previous year. This suggests that the company may have managed its working capital more effectively or streamlined its operating processes.

In 2022, the cash conversion cycle was -65.78 days, reflecting a slightly less efficient performance compared to 2023 but still better than the years prior. The negative values in both 2023 and 2022 indicate that the company was able to convert its resources into cash at a faster rate than it paid its suppliers, which is generally positive for liquidity and cash flow management.

In 2021, the cash conversion cycle improved significantly to -0.79 days, indicating that the company was able to generate cash almost immediately after receiving inventory and paying suppliers. This suggests a strong position in managing working capital and efficient operations.

In 2020, the cash conversion cycle was 13.83 days, indicating a slight delay in converting resources into cash compared to the previous year. However, the company still managed to do so in a relatively timely manner.

In 2019, the cash conversion cycle was 47.44 days, suggesting that it took the company longer to convert its investments in inventory and receivables into cash. This could be an indicator of less efficient working capital management or operational processes during that period.

Overall, the trend in Idacorp, Inc.'s cash conversion cycle shows improvement in recent years, with the company being able to convert resources into cash more efficiently and quickly, particularly in 2021 and 2023. It is essential for the company to continue this positive trend to ensure strong liquidity and operational effectiveness in the future.