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.