Essential Utilities Inc (WTRG)

Quick ratio

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 US$ in thousands 4,612 8,505 11,642 20,149 11,398 23,366 12,976 58,298 10,567 9,736 8,404 18,046 4,827 8,494 7,227 31,848 1,868,920 2,030,570 1,974,080 4,053
Short-term investments US$ in thousands — 2,345,700 — — — — — — — — 1,349,870 1,310,000 1,258,100 1,757 5,943 5,473 5,984 6,253 7,448 6,840
Receivables US$ in thousands 245,736 208,836 225,679 331,216 376,828 202,446 222,779 287,127 260,921 171,689 193,063 253,164 273,313 189,773 213,737 263,551 107,620 116,979 110,741 96,410
Total current liabilities US$ in thousands 797,927 896,568 765,135 803,286 1,021,870 848,093 544,125 678,178 675,063 516,029 469,155 503,394 603,873 666,959 448,179 827,374 323,461 352,123 398,949 434,099
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

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, also known as the acid-test ratio, measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1.0 may indicate potential liquidity issues, as it suggests that the company may not have enough liquid assets to cover its current liabilities.

Analyzing Essential Utilities Inc.'s quick ratio over the past eight quarters, we can observe fluctuations in the company's liquidity position. In Q4 2023, the quick ratio stood at 0.48, indicating that the company had $0.48 in liquid assets available to cover each dollar of current liabilities. This suggests a slight improvement compared to the previous quarter but remains below the ideal threshold of 1.0.

Looking at the trend over the past year, we can see that Essential Utilities Inc.'s quick ratio has varied, reaching a low of 0.31 in Q3 2023 and a high of 0.57 in Q1 2022. The variability in the quick ratio may imply fluctuations in the company's ability to meet its short-term obligations with its current liquid assets.

It is important for stakeholders to monitor Essential Utilities Inc.'s quick ratio closely to assess the company's liquidity risk. A sustained quick ratio below 1.0 could indicate potential challenges in meeting short-term financial obligations, which may require further investigation and management attention to ensure financial stability and solvency.