Essential Utilities Inc (WTRG)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	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
Receivables	US$ in thousands	245,736	376,828	260,921	273,313	107,620
Total current liabilities	US$ in thousands	797,927	1,021,870	675,063	603,873	323,461
Quick ratio		0.31	0.38	0.40	2.54	6.13

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($4,612K + $—K + $245,736K) ÷ $797,927K
= 0.31

The quick ratio of Essential Utilities Inc has seen fluctuations over the past five years. It decreased from 6.25 in 2019 to 0.53 in 2020, indicating a significant drop in short-term liquidity. However, the ratio improved slightly to 0.49 in 2021 before declining again to 0.44 in 2022. In the most recent year, 2023, the quick ratio further decreased to 0.48.

This trend suggests that Essential Utilities Inc may be facing challenges in maintaining sufficient liquid assets to cover its short-term obligations. A quick ratio below 1.0 indicates potential difficulty in meeting current liabilities using only quick assets, such as cash and receivables, without relying on inventory. It is crucial for the company to closely monitor its liquidity position and take necessary steps to improve its short-term financial health.