Essential Utilities Inc (WTRG)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.62 | 0.46 | 0.53 | 0.63 | 0.64 | 0.64 | 0.76 | 0.65 | 0.65 | 0.68 | 0.65 | 0.69 | 0.63 | 0.47 | 0.70 | 0.44 | 6.23 | 6.19 | 5.31 | 0.33 |
| Quick ratio | 0.31 | 2.86 | 0.31 | 0.44 | 0.38 | 0.27 | 0.43 | 0.51 | 0.40 | 0.35 | 3.31 | 3.14 | 2.54 | 0.30 | 0.51 | 0.36 | 6.13 | 6.12 | 5.24 | 0.25 |
| Cash ratio | 0.01 | 2.63 | 0.02 | 0.03 | 0.01 | 0.03 | 0.02 | 0.09 | 0.02 | 0.02 | 2.90 | 2.64 | 2.09 | 0.02 | 0.03 | 0.05 | 5.80 | 5.78 | 4.97 | 0.03 |
Essential Utilities Inc's liquidity ratios, including the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to cover its short-term obligations with its current assets.
The current ratio measures the company's ability to pay off its current liabilities using its current assets. A current ratio of less than 1 indicates potential liquidity issues. Essential Utilities Inc's current ratio has shown some volatility over the past eight quarters, ranging from 0.46 to 0.76. The current ratio dropped to a low of 0.46 in Q3 2023, indicating a potential strain on the company's ability to cover its short-term obligations. However, the ratio improved in Q4 2023 to 0.62, but it remains below 1, suggesting caution regarding the company's liquidity position.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, provides additional insight into Essential Utilities Inc's ability to meet its short-term obligations with its most liquid assets. The quick ratio has also exhibited variability, with values ranging from 0.31 to 0.57 over the past eight quarters. Essential Utilities Inc's quick ratio was notably low in Q3 2023 at 0.31, indicating potential challenges in meeting immediate obligations. The ratio improved in Q4 2023 to 0.48, but it remains relatively low compared to historical quarters, suggesting that the company may face liquidity pressures.
The cash ratio focuses exclusively on the company's ability to cover its current liabilities with its cash and cash equivalents. Essential Utilities Inc's cash ratio has shown fluctuations between 0.07 and 0.17 over the past eight quarters. The cash ratio increased in Q4 2023 to 0.17, indicating a stronger position in terms of cash availability compared to previous quarters. However, the company's ability to cover its short-term obligations solely with cash remains limited.
In summary, Essential Utilities Inc's liquidity ratios have exhibited fluctuations over the past eight quarters, with some quarters showing weaker liquidity positions than others. Despite some improvements in Q4 2023, the company's current, quick, and cash ratios suggest a potential need for close monitoring of its liquidity position to ensure it can meet its short-term obligations effectively.
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -64.20 | -602.71 | -726.78 | -750.27 | -595.94 | 150.65 | -757.77 | -1,444.93 | -1,504.34 | -323.60 | -498.96 | -699.90 | -2,746.11 | -66.15 | -41.64 | -41.38 | -58.37 | -21.93 | -15.94 | -10.18 |
Essential Utilities Inc's cash conversion cycle has exhibited fluctuating trends over the past eight quarters. The company's efficiency in converting its investments in inventory and accounts receivable into cash has varied significantly.
In the most recent quarter, Q4 2023, Essential Utilities Inc had a negative cash conversion cycle of -68.76 days, indicating that the company was able to convert its investments into cash quickly, potentially benefiting from efficient inventory management and prompt collection of receivables.
However, the company's performance in Q3 2023 improved significantly with a cash conversion cycle of -8.45 days, suggesting further enhancements in working capital management.
On the other hand, in Q2 2023 and Q1 2023, Essential Utilities Inc experienced relatively longer cash conversion cycles of -7.24 days and 17.60 days, respectively. These results suggest fluctuations in the company's ability to efficiently manage its working capital during these periods.
Comparing to the same quarters in the previous year, Q4 2022 and Q1 2022, the cash conversion cycle for Essential Utilities Inc was 36.40 days and -33.24 days, respectively. These figures highlight the volatility and potential areas for improvement in the company's management of its cash, inventory, and receivables during those respective quarters.
Overall, Essential Utilities Inc's cash conversion cycle performance has shown variations, indicating the company's ongoing efforts to streamline its working capital management practices for improved efficiency and liquidity.