The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Adani Power's current ratio for the quarter that ended in Mar. 2024 was 1.62.
Adani Power has a current ratio of 1.62. It generally indicates good short-term financial strength.
The historical rank and industry rank for Adani Power's Current Ratio or its related term are showing as below:
BOM:533096'
s Current Ratio Range Over the Past 10 Years
Min: 0.5 Med: 0.77 Max: 1.62
Current: 1.62
During the past 13 years, Adani Power's highest Current Ratio was 1.62. The lowest was 0.50. And the median was 0.77.
BOM:533096's Current Ratio is ranked better than 62.16% of 436
companies
in the Utilities - Independent Power Producers industry
Industry Median: 1.315
vs BOM:533096: 1.62
Adani Power Current Ratio Historical Data
The historical data trend for Adani Power's Current Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Adani Power's Current Ratio
For the Utilities - Independent Power Producers subindustry, Adani Power's Current Ratio, along with its competitors' market caps and Current Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Adani Power's Current Ratio Distribution in the Utilities - Independent Power Producers Industry
For the Utilities - Independent Power Producers industry and Utilities sector, Adani Power's Current Ratio distribution charts can be found below:
* The bar in red indicates where Adani Power's Current Ratio falls into.
Adani Power Current Ratio Calculation
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
Adani Power's Current Ratio for the fiscal year that ended in Mar. 2024 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Adani Power (BOM:533096) Current Ratio Explanation
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Adani Power Current Ratio Related Terms
Thank you for viewing the detailed overview of Adani Power's Current Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Adani Power Ltd is an electric utility company that produces and transmits energy from its portfolio of power plants located throughout India. The company produces its energy using thermal fuel sources, such as coal but also owns facilities that utilize solar and steam generation. Adani Power generates the vast majority of its revenue through the sale of electricity to state distribution companies and the transmission of energy to the state and central utilities. The company's electricity sales are structured through long-term agreements. Adani Power is India's private power producer, owns the world's private coal-based power plant, and is a part of the conglomerate that is India's coal importer.
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