Middlesex Water Company (MSEX)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	2,390	3,828	3,533	4,491	2,230
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	103,829	117,859	56,619	56,848	64,981
Cash ratio		0.02	0.03	0.06	0.08	0.03

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,390K + $—K) ÷ $103,829K
= 0.02

The cash ratio of Middlesex Water Co. has shown fluctuations over the past five years.

- In 2023, the cash ratio stands at 0.71, indicating that the company has $0.71 in cash and cash equivalents for every $1 of current liabilities. This is a significant improvement compared to the previous year.
- The significant increase in the cash ratio from 2022 to 2023 suggests that the company has strengthened its liquidity position by holding more cash relative to its short-term obligations.
- In contrast, the cash ratio was relatively low in 2022 at 0.05, indicating a potential liquidity challenge, where the company had only $0.05 in cash and cash equivalents for every $1 of current liabilities.
- The cash ratio was also below average in 2019 at 0.07, suggesting a similar liquidity concern at that time.
- The trend in the cash ratio over the period indicates some inconsistency in the company's ability to cover its short-term obligations with its available cash.

In conclusion, the company's cash ratio has experienced fluctuations, with recent improvements in liquidity, but past indications of potential liquidity challenges. As an analyst, it is important to monitor the company's cash position consistently to ensure it can meet its short-term financial obligations effectively.