MGE Energy Inc (MGEE)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 21,302 | 11,140 | 11,604 | 17,438 | 44,738 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 97,177 | 95,533 | 109,911 | 97,111 | 76,195 |
| Total current liabilities | US$ in thousands | 125,563 | 157,156 | 225,062 | 117,847 | 190,926 |
| Quick ratio | 0.94 | 0.68 | 0.54 | 0.97 | 0.63 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($21,302K
+ $—K
+ $97,177K)
÷ $125,563K
= 0.94
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. In the case of MGE Energy Inc, the quick ratio has fluctuated over the years, with values of 0.63 as of December 31, 2020, 0.97 as of December 31, 2021, 0.54 as of December 31, 2022, 0.68 as of December 31, 2023, and 0.94 as of December 31, 2024.
A quick ratio below 1 indicates that the company may have difficulty meeting its short-term liabilities with its quick assets alone. MGE Energy Inc's quick ratio was below 1 for most of the years analyzed, suggesting a potential liquidity risk. However, the ratio has shown some improvement in recent years, reaching its highest value of 0.97 as of December 31, 2021, and 0.94 as of December 31, 2024.
It is important for investors and stakeholders to monitor the company's quick ratio over time to assess its short-term liquidity position and ability to cover immediate financial obligations without relying on inventory sales. Further analysis of the company's asset composition and cash flow trends may provide additional insights into its liquidity management.