Northwest Natural Gas Co (NWN)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	38,490	32,920	29,270	18,559	30,168
Short-term investments	US$ in thousands	1,636,610	-130,313	194,412	48,130	13,678
Total current liabilities	US$ in thousands	60,575	696,878	898,734	724,765	627,083
Cash ratio		27.65	-0.14	0.25	0.09	0.07

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($38,490K + $1,636,610K) ÷ $60,575K
= 27.65

The cash ratio of Northwest Natural Gas Co has shown a fluctuating trend over the years according to the data provided. As of December 31, 2020, the cash ratio was 0.07, indicating that the company had $0.07 in cash for every $1 of current liabilities. By December 31, 2021, the cash ratio improved slightly to 0.09, suggesting a marginal increase in the company's liquidity position.

Significantly, by December 31, 2022, the cash ratio improved substantially to 0.25, indicating a notable increase in the company's ability to meet its short-term obligations with cash on hand. However, the cash ratio took a sharp decline by December 31, 2023, reaching a negative value of -0.14. This negative cash ratio figure is a cause for concern as it implies that the company's cash reserves were insufficient to cover its current liabilities during that period.

Remarkably, the cash ratio exhibited a remarkable surge by December 31, 2024, soaring to 27.65. This exceptionally high cash ratio signifies a substantial improvement in the company's liquidity position, indicating that Northwest Natural Gas Co had a significant amount of cash on hand relative to its current liabilities at the end of 2024.

In conclusion, the cash ratio of Northwest Natural Gas Co has displayed significant fluctuations over the years, with both positive and negative implications for the company's liquidity and ability to meet short-term obligations. It is crucial for investors and stakeholders to monitor the company's cash ratio closely to assess its financial health and risk management strategies.