Kodiak Gas Services, Inc. (KGS)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	383,661	230,963	204,035	164,148	142,415
Total current liabilities	US$ in thousands	319,369	210,629	188,974	144,061	1,642,990
Current ratio		1.20	1.10	1.08	1.14	0.09

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $383,661K ÷ $319,369K
= 1.20

The analysis of Kodiak Gas Services, Inc.'s current ratio over the specified period reveals notable fluctuations with an overall trend toward stabilization and modest improvement. As of December 31, 2020, the company's current ratio was notably low at 0.09, indicating a significant liquidity concern and suggesting that current liabilities substantially exceeded current assets during that year. This extreme ratio underscores potential financial strain or a reliance on non-current assets or external financing to meet short-term obligations.

By December 31, 2021, there was a substantial increase to 1.14, signifying a material strengthening in liquidity position. This improvement reflects enhanced current assets relative to current liabilities, possibly resulting from operational efficiencies, asset reallocation, or improved cash or receivables management. The ratio stabilized slightly at 1.08 by December 31, 2022, indicating that the company maintained its improved liquidity position, with current assets remaining just over current liabilities.

Moving into 2023, the ratio marginally increased to 1.10, and further to 1.20 by December 31, 2024, illustrating a gradual but consistent enhancement in liquidity. These incremental improvements suggest ongoing efforts by the company to bolster its ability to meet short-term financial obligations, possibly through prudent asset management or equitable financing strategies. The current ratio values above 1.00 from 2021 onward denote a generally satisfactory liquidity level, although the low point in 2020 highlights the importance of continuous liquidity management to avoid potential solvency issues.

Overall, the current ratio trajectory indicates a recovery from a critically low position in 2020 to a more stable and improving liquidity profile in subsequent years. While the ratios remain within a healthy range, ongoing monitoring is necessary to sustain financial stability and ensure the company's capacity to meet short-term obligations without undue reliance on external sources of liquidity.