PG&E Corp (PCG)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 635,000 | 734,000 | 291,000 | 484,000 | 1,570,000 |
| Short-term investments | US$ in thousands | 33,230,000 | — | — | — | — |
| Receivables | US$ in thousands | 2,048,000 | 2,645,000 | 2,345,000 | 1,883,000 | 1,287,000 |
| Total current liabilities | US$ in thousands | 17,314,000 | 15,788,000 | 17,427,000 | 13,581,000 | 7,631,000 |
| Quick ratio | 2.07 | 0.21 | 0.15 | 0.17 | 0.37 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($635,000K
+ $33,230,000K
+ $2,048,000K)
÷ $17,314,000K
= 2.07
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1.0 may indicate potential liquidity issues, as the company may struggle to cover its current liabilities without relying on inventory.
Looking at the data for PG&E Corp., we observe that the quick ratio has been fluctuating over the past five years. In 2019, the quick ratio was relatively high at 1.25, indicating a strong ability to cover short-term liabilities. However, in subsequent years, the quick ratio has declined, reaching its lowest point in 2021 at 0.60. This could suggest a decrease in liquidity and potentially raise concerns about the company's ability to meet immediate financial obligations without relying on inventory.
Although there was a slight improvement in the quick ratio in 2023 compared to 2022, it remains below 1.0 at 0.76. This indicates that PG&E Corp. may still face challenges in meeting its short-term obligations using its quick assets alone. It would be essential for investors and stakeholders to monitor this ratio closely to assess the company's liquidity position and financial health in the short term.
Peer comparison
Dec 31, 2023