Otter Tail Corporation (OTTR)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	230,373	118,996	1,537	1,163	21,199
Short-term investments	US$ in thousands	7,771	5,503	5,432	1,662	1,586
Receivables	US$ in thousands	159,665	146,041	176,789	117,174	111,379
Total current liabilities	US$ in thousands	309,757	237,636	387,699	436,786	189,741
Quick ratio		1.28	1.14	0.47	0.27	0.71

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($230,373K + $7,771K + $159,665K) ÷ $309,757K
= 1.28

The quick ratio of Otter Tail Corporation has shown varying trends over the past five years. The quick ratio measures the company's ability to meet its short-term obligations using its most liquid assets, excluding inventory.

In 2019, the quick ratio was at 0.83, indicating that the company had $0.83 of liquid assets available to cover each dollar of current liabilities. This level suggests a relatively stable liquidity position.

In 2020, the quick ratio decreased to 0.33, signaling a significant decline in liquidity. This could imply that the company may have had difficulties meeting its short-term obligations using its readily available assets.

However, in 2021, there was a significant improvement in the quick ratio to 0.57, indicating a better ability to cover current liabilities with liquid assets compared to the previous year. This improvement could be attributed to enhanced management of the company's current assets and liabilities.

The quick ratio continued to strengthen in the following years, reaching 1.29 in 2022 and further enhancing to 1.36 in 2023. These higher quick ratios suggest that Otter Tail Corporation has improved its liquidity position and now has more than enough liquid assets to cover its short-term obligations.

Overall, the trend in Otter Tail Corporation's quick ratio shows fluctuations in liquidity over the years, with notable improvements in recent years. Higher quick ratios are generally positive indicators of a company's ability to meet its short-term obligations and manage its working capital effectively. It is essential for investors and stakeholders to monitor these ratios to assess the company's financial health and stability.