Middlesex Water Company (MSEX)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	2,390	3,828	3,533	4,491	2,230
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	27,469	24,677	22,584	21,634	19,091
Total current liabilities	US$ in thousands	103,829	117,859	56,619	56,848	64,981
Quick ratio		0.29	0.24	0.46	0.46	0.33

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($2,390K + $—K + $27,469K) ÷ $103,829K
= 0.29

The quick ratio of Middlesex Water Co. has shown varied performance over the last five years, ranging from 0.26 to 0.98. In 2023, the quick ratio stood at 0.98, indicating that the company's ability to meet its short-term liabilities with its most liquid assets has significantly improved compared to the prior year. This implies that Middlesex Water Co. could comfortably cover its short-term obligations using its current assets excluding inventory.

The quick ratio of 0.98 in 2023 suggests a healthier liquidity position for the company, which may be attributed to effective management of current assets and liabilities. However, it is essential to note the sharp increase from the quick ratio of 0.26 in 2022, which was a cause for concern as it indicated a potential liquidity strain.

Comparing the quick ratio of 2023 to the ratios in 2021 (0.51), 2020 (0.51), and 2019 (0.36), the current liquidity position of the company appears to be more robust. It is recommended that Middlesex Water Co. continues to monitor its quick ratio over time to ensure it maintains an adequate level of liquidity to meet its short-term obligations effectively.