Middlesex Water Company (MSEX)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.52 | 0.65 | 0.90 | 0.95 | 1.05 | 1.12 | 0.46 | 0.41 | 0.32 | 0.45 | 0.49 | 0.55 | 0.61 | 0.44 | 0.46 | 0.48 | 0.60 | 0.44 | 0.52 | 0.50 |
| Quick ratio | 0.41 | 0.53 | 0.30 | 0.26 | 0.29 | 0.27 | 0.35 | 0.30 | 0.24 | 0.34 | 0.37 | 0.42 | 0.46 | 0.34 | 0.35 | 0.36 | 0.46 | 0.35 | 0.41 | 0.41 |
| Cash ratio | 0.05 | 0.08 | 0.06 | 0.02 | 0.02 | 0.02 | 0.05 | 0.05 | 0.03 | 0.03 | 0.05 | 0.06 | 0.06 | 0.06 | 0.07 | 0.06 | 0.08 | 0.06 | 0.16 | 0.19 |
Middlesex Water Company's liquidity ratios have shown fluctuations over the years based on the provided data.
1. Current Ratio: The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, ranged from a low of 0.32 as of December 31, 2022, to a high of 1.12 as of September 30, 2023. Overall, the current ratio has been quite volatile, indicating potential challenges in meeting short-term obligations consistently.
2. Quick Ratio: The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, exhibited similar volatility, ranging from 0.24 as of December 31, 2022, to 0.53 as of September 30, 2024. This ratio provides insight into the company's ability to meet its short-term liabilities without relying on inventory, and the fluctuations suggest potential variability in the company's ability to meet immediate obligations.
3. Cash Ratio: The cash ratio, which is the most conservative liquidity ratio as it considers only cash and cash equivalents to current liabilities, ranged from 0.02 as of December 31, 2023, to 0.19 as of March 31, 2020. The cash ratio indicates the company's ability to cover its current liabilities with its most liquid assets, and the fluctuations imply changes in the company's cash position over time.
In summary, Middlesex Water Company's liquidity ratios have demonstrated fluctuations over the years, indicating potential variability in the company's ability to meet its short-term obligations with its current assets, excluding inventory, or cash and cash equivalents. It is important for the company to closely monitor these ratios to ensure it maintains adequate liquidity to meet its financial obligations.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -164.07 | -10.13 | 8.64 | 8.81 | -2.49 | -90.66 | -98.49 | -99.94 | -85.08 | -94.32 | -92.35 | -52.00 | -72.42 | -39.85 | -106.42 | -118.94 | -170.04 | -123.70 | -107.45 | -131.73 |
The cash conversion cycle of Middlesex Water Company has fluctuated over the years, indicating variability in its ability to efficiently convert its investments in inventory and accounts receivable into cash. The company's cash conversion cycle was negative for most periods, suggesting that it was able to collect cash from customers and pay suppliers faster than it took to produce and sell its products. This may reflect strong working capital management practices.
From March 31, 2020, to September 30, 2022, the cash conversion cycle remained consistently negative, indicating a rapid conversion of resources into cash. However, from December 31, 2022, the cash conversion cycle turned positive, indicating a potential increase in the time taken to convert investments into cash. This may require further analysis to understand the reasons behind the change.
By December 31, 2024, the cash conversion cycle had decreased significantly to -164.07 days, showing a return to a more efficient cash conversion process. This improvement may be a result of better inventory management, faster receivables collection, or extended payables payment terms.
It is essential for Middlesex Water Company to closely monitor its cash conversion cycle to ensure effective working capital management and maintain healthy cash flows for sustainable operations and growth.