UNITIL Corporation (UTL)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	6,500	9,000	6,500	6,000	5,200
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	277,300	260,100	173,500	136,100	159,800
Cash ratio		0.02	0.03	0.04	0.04	0.03

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($6,500K + $—K) ÷ $277,300K
= 0.02

The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. In the case of Unitil Corp., the trend of the cash ratio over the past five years shows a gradual decrease from 0.28 in 2019 to 0.27 in 2023.

A cash ratio of 0.27 in 2023 indicates that for every dollar of current liabilities, Unitil Corp. has $0.27 in cash and cash equivalents to cover those obligations. While the company has experienced a slight decline in its cash ratio over the years, it is important to note that a higher cash ratio generally indicates a stronger ability to meet short-term financial obligations.

Unitil Corp. should continue to monitor its cash position and maintain a sufficient level of liquidity to ensure it can comfortably meet its short-term financial obligations as they come due. Additionally, the company may need to implement strategies to improve its cash reserves and liquidity position, especially if the downward trend in the cash ratio continues.