Kodiak Gas Services, Inc. (KGS)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	4,750	5,562	20,431	28,795	24,105
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	261,212	130,616	101,106	80,749	65,275
Total current liabilities	US$ in thousands	319,369	210,629	188,974	144,061	1,642,990
Quick ratio		0.83	0.65	0.64	0.76	0.05

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($4,750K + $—K + $261,212K) ÷ $319,369K
= 0.83

The quick ratio of Kodiak Gas Services, Inc. demonstrates significant variation over the analyzed period from December 31, 2020, to December 31, 2024. As of December 31, 2020, the company had a very low quick ratio of 0.05, indicating that its most liquid assets were insufficient to cover its current liabilities by a substantial margin, which may suggest liquidity constraints or a substantial reliance on less liquid assets for operational needs at that time.

In the subsequent year, the ratio increased markedly to 0.76 by December 31, 2021. This substantial improvement signals enhanced liquidity position, with the company's quick assets capable of covering a considerable portion of its short-term obligations, possibly reflecting improved cash management, reduction in current liabilities, or a buildup of more liquid assets.

The ratio experienced a slight decline to 0.64 by December 31, 2022, but remained substantially higher than the 2020 level. This indicates a stabilization in liquidity, though it suggests that the company's ability to meet immediate liabilities, while improved, still has room for technical enhancement.

From December 31, 2022, through December 31, 2024, the quick ratio maintains a generally upward trend, culminating at 0.83. This progression indicates ongoing improvements in the company's liquidity position, with quick assets increasingly able to cover short-term liabilities. A ratio approaching 1.0 suggests that the company is moving toward a more robust liquidity stance, reducing potential liquidity risks.

Overall, the pattern of the quick ratio suggests that Kodiak Gas Services, Inc. has significantly strengthened its liquidity over the examined period, transitioning from a very low liquidity status in 2020 to a more balanced and healthy position by 2024. These movements may reflect effective liquidity management, changes in asset composition, or alterations in its current liabilities, underpinning the company's improved capacity to meet its short-term financial commitments.