SJW Corporation (SJW)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	9,723	12,344	10,908	5,269	12,944
Short-term investments	US$ in thousands	—	—	57,632	14,367	—
Receivables	US$ in thousands	121,097	110,454	102,460	96,051	79,240
Total current liabilities	US$ in thousands	342,974	268,322	203,271	350,795	234,567
Quick ratio		0.38	0.46	0.84	0.33	0.39

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($9,723K + $—K + $121,097K) ÷ $342,974K
= 0.38

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term liabilities with its most liquid assets. A higher quick ratio is generally preferable as it indicates a stronger ability to cover immediate financial obligations.

Observing SJW Group's quick ratio over the past five years, we can see a fluctuating trend. The quick ratio decreased from 0.50 in 2019 to 0.35 in 2020, indicating a potential difficulty in meeting short-term obligations with liquid assets at the end of 2020. However, there was an improvement in 2021 with a quick ratio of 0.65, suggesting a better position to cover immediate liabilities compared to the prior year.

In 2022, the quick ratio experienced a slight decline to 0.58, which could indicate a slightly reduced capacity to meet short-term obligations. The trend continued in 2023 with a further decrease to 0.46, reflecting a more constrained ability to cover immediate liabilities with liquid assets at the end of 2023.

Overall, while SJW Group's quick ratio has shown some variability, the recent downward trend in the ratio suggests potential challenges in meeting short-term obligations with liquid assets. It would be advisable for stakeholders to monitor the company's liquidity position closely in light of these fluctuations in the quick ratio.