Otter Tail Corporation (OTTR)
Current ratio
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
Total current assets | US$ in thousands | 570,170 | 452,752 | 369,354 | 234,832 | 254,860 |
Total current liabilities | US$ in thousands | 309,757 | 237,636 | 387,699 | 436,786 | 189,741 |
Current ratio | 1.84 | 1.91 | 0.95 | 0.54 | 1.34 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $570,170K ÷ $309,757K
= 1.84
The current ratio of Otter Tail Corporation has exhibited fluctuations over the last five years, indicating variations in the company's short-term liquidity position.
In 2023, the current ratio stands at 1.84, showing a slight decrease from the previous year's ratio of 1.91. This suggests that Otter Tail Corporation may have slightly fewer current assets relative to its current liabilities in 2023 compared to 2022. However, the current ratio remains above 1, indicating that the company's current assets are generally sufficient to cover its current liabilities, providing a healthy buffer for short-term obligations.
Looking back at 2021, the current ratio was notably lower at 0.95, which could signal potential liquidity challenges or difficulties in meeting short-term obligations during that period. The significant improvement in the current ratio in 2022 and 2023 indicates that Otter Tail Corporation has since strengthened its liquidity position, potentially through increased current assets or reduced current liabilities.
The sharp increase in the current ratio from 2020 to 2021 may suggest that the company faced liquidity strains or mismanagement of short-term assets and liabilities in 2020, leading to a lower current ratio of 0.54. However, the subsequent recovery and improvement in the current ratio in the following years reflect efforts to enhance liquidity management and strengthen the company's financial position.
Overall, the current ratio trend of Otter Tail Corporation indicates a positive trajectory in managing short-term liquidity risk, with recent years showing a more favorable liquidity position compared to previous periods. Management should continue monitoring and optimizing the current ratio to ensure the company maintains an appropriate level of liquidity to meet its short-term obligations effectively.
Peer comparison
Dec 31, 2023