SJW Corporation (SJW)

SJW Group's liquidity ratios have shown fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has remained relatively low and unstable, ranging from 0.36 to 0.66. This indicates that the company may have difficulty meeting its short-term liabilities with its current assets alone.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also exhibited variability but generally improved from 0.35 in 2020 to 0.65 in 2021 before declining slightly to 0.46 in 2023.

The cash ratio, which is the most conservative measure of liquidity as it considers only cash and cash equivalents, has ranged from 0.09 to 0.19 over the past five years. This ratio indicates the company's ability to cover its short-term liabilities using its readily available cash resources, and the lower values suggest that SJW Group may have limited cash on hand compared to its short-term obligations.

Overall, SJW Group's liquidity ratios suggest a mixed performance in terms of its ability to meet short-term financial obligations. The company may need to carefully manage its working capital and liquidity position to ensure it can handle any unexpected cash flow challenges that may arise in the future.

---

Additional liquidity measure

The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash inflows from sales. It provides insights into the efficiency of a company's working capital management.

Looking at the data for SJW Group over the past five years, we can observe fluctuations in the cash conversion cycle. In 2023, the company experienced a negative cash conversion cycle of -1.78 days, indicating that its operating cycle is relatively short and it can convert its investments into cash quickly, which may be a favorable sign for liquidity.

In contrast, in 2022 and 2021, the company had positive cash conversion cycles of 15.30 days and 13.75 days respectively. This suggests that SJW Group required a longer time to convert its investments into cash during these periods, potentially impacting its liquidity and cash flow.

In 2020, the company saw a shorter cash conversion cycle of 4.06 days, indicating an improvement in working capital efficiency compared to the previous year. Lastly, in 2019, SJW Group had a negative cash conversion cycle of -6.12 days, which suggests that it was able to generate cash quickly from its operations.

Overall, fluctuations in the cash conversion cycle for SJW Group over the past five years reflect changes in the company's efficiency in managing its working capital, which can have implications for its overall financial health and liquidity management.