Essential Utilities Inc (WTRG)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	4,612	11,398	10,567	4,827	1,868,920
Short-term investments	US$ in thousands	—	—	—	1,258,100	5,984
Total current liabilities	US$ in thousands	797,927	1,021,870	675,063	603,873	323,461
Cash ratio		0.01	0.01	0.02	2.09	5.80

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($4,612K + $—K) ÷ $797,927K
= 0.01

The cash ratio of Essential Utilities Inc has fluctuated over the past five years, ranging from a low of 0.07 in December 2022 to a high of 5.91 in December 2019. The cash ratio measures a company's ability to cover its short-term obligations using only its cash and cash equivalents.

In general, a higher cash ratio indicates a stronger ability to cover short-term liabilities. Essential Utilities Inc experienced a significant decrease in its cash ratio from 5.91 in 2019 to 0.10 in 2021, reflecting a potential decrease in liquidity during that period. However, the cash ratio improved to 0.17 in 2023, indicating a better ability to meet short-term obligations with available cash on hand.

It is important to further analyze the company's overall liquidity position and compare the cash ratio to industry benchmarks to assess Essential Utilities Inc's financial health accurately.