UNITIL Corporation (UTL)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.83 | 0.91 | 0.58 | 0.68 | 0.64 | 0.64 | 0.68 | 0.78 | 0.75 | 0.78 | 0.90 | 1.03 | 0.92 | 0.96 | 0.86 | 1.08 | 1.02 | 1.19 | 0.73 | 0.86 |
| Quick ratio | 0.38 | 0.40 | 0.25 | 0.33 | 0.33 | 0.32 | 0.32 | 0.41 | 0.39 | 0.44 | 0.47 | 0.56 | 0.47 | 0.52 | 0.45 | 0.66 | 0.54 | 0.65 | 0.38 | 0.48 |
| Cash ratio | 0.03 | 0.04 | 0.01 | 0.02 | 0.02 | 0.02 | 0.03 | 0.03 | 0.03 | 0.04 | 0.03 | 0.04 | 0.04 | 0.07 | 0.04 | 0.05 | 0.04 | 0.08 | 0.03 | 0.04 |
Based on the provided data on liquidity ratios for UNITIL Corporation, let's analyze the current ratio, quick ratio, and cash ratio over the indicated periods:
1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. A ratio above 1 indicates the company has more current assets than current liabilities.
- UNITIL's current ratio fluctuated over the periods, ranging from 0.58 to 1.19.
- The ratio peaked at 1.19 in September 2020, suggesting the company had more current assets to cover its short-term obligations at that point.
- However, the current ratio fell below 1 several times, indicating potential liquidity challenges in meeting short-term obligations during those periods.
2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets.
- UNITIL's quick ratio varied between 0.25 and 0.66 during the periods under review.
- A quick ratio below 1 implies the company may struggle to meet its short-term liabilities without relying on the sale of inventory.
- The lowest quick ratio was observed in June 2024 at 0.25, indicating a lower level of highly liquid assets relative to current liabilities.
3. Cash Ratio:
- The cash ratio focuses solely on the company's ability to cover its current liabilities with its cash and cash equivalents.
- UNITIL's cash ratio ranged from 0.01 to 0.08 over the periods.
- A cash ratio of less than 1 suggests that the company may not have enough cash on hand to cover its short-term obligations.
- The highest cash ratio was noted in September 2020 at 0.08, indicating a relatively strong cash position compared to its current liabilities.
In conclusion, the analysis of UNITIL Corporation's liquidity ratios shows fluctuations in its ability to meet short-term obligations. It is crucial for the company to maintain a healthy liquidity position to ensure it can fulfill its current financial commitments efficiently.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -7.60 | 0.83 | 0.65 | 1.90 | -9.96 | -0.47 | -1.89 | 0.95 | -22.45 | 1.95 | -0.82 | -0.51 | -21.83 | -10.98 | -17.79 | -2.90 | -15.46 | -5.76 | -5.42 | -15.52 |
The cash conversion cycle of UNITIL Corporation has shown fluctuations over the periods analyzed. Initially, the company had a negative cash conversion cycle, indicating a efficient management of cash inflows and outflows. However, in the later periods, the trend reversed, with the cash conversion cycle turning positive, which could be a sign of potential issues in managing its working capital efficiently.
In more recent periods, there have been improvements in the cash conversion cycle, with some periods showing negative values again, suggesting a better control over cash flows. However, towards the end of the period analyzed, the cash conversion cycle turned negative, indicating that the company may be facing challenges in managing cash efficiently.
Overall, the cash conversion cycle analysis suggests that UNITIL Corporation has experienced fluctuations in its working capital management efficiency over the periods, and it may need to focus on consistently optimizing its cash conversion cycle to ensure healthy liquidity and operational efficiency.