CH Robinson Worldwide Inc (CHRW)

The liquidity ratios of C.H. Robinson Worldwide, Inc. for the past five years indicate certain trends and levels of financial strength. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has shown fluctuations over the years. In 2023, the current ratio improved to 1.40 from 1.08 in 2022, suggesting an enhanced liquidity position compared to the previous year. However, the current ratio in 2023 is still lower than the levels seen in 2020 and 2019, indicating that the company may have slightly less liquidity than in those years.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Like the current ratio, the quick ratio also demonstrates fluctuations in C.H. Robinson Worldwide's liquidity position over the years. The quick ratio in 2023 remained consistent with the current ratio at 1.40, suggesting that the company can cover its short-term obligations adequately even when excluding inventory.

The cash ratio, which indicates the firm's ability to cover current liabilities with cash and cash equivalents, has shown a declining trend in recent years. In 2023, the cash ratio decreased to 0.24 from 0.18 in 2022, reflecting a lower level of cash reserves relative to current liabilities. The downward trend in the cash ratio over the past few years may indicate a strain on the company's cash position, highlighting a potential need for better management of liquidity and working capital.

Overall, the liquidity ratios of C.H. Robinson Worldwide, Inc. demonstrate varying levels of liquidity and short-term solvency over the past five years. While the company's current and quick ratios have shown some improvements in 2023 compared to the previous year, the declining trend in the cash ratio raises concerns about the adequacy of cash reserves to meet short-term obligations. Continuous monitoring and effective management of liquidity will be crucial for sustaining financial health and meeting operational needs.

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Additional liquidity measure

The cash conversion cycle for C.H. Robinson Worldwide, Inc. has shown some fluctuations over the past five years.

In 2023, the cash conversion cycle decreased to 17.66 days from 18.84 days in the previous year. This indicates that the company was able to convert its investments in inventory into cash more efficiently in 2023 compared to 2022.

However, when compared to 2021, where the cash conversion cycle was 29.44 days, the company improved its efficiency significantly in 2023. This suggests that the company managed its inventory, accounts receivable, and accounts payable more effectively in 2023.

In 2020, the cash conversion cycle was 23.55 days, slightly higher than in 2023. This indicates that the company may have faced challenges in managing its working capital in 2020, resulting in a longer cash conversion cycle.

Comparing the 2023 figure to that of 2019, where the cash conversion cycle was 18.83 days, the company has made progress in optimizing its working capital efficiency.

Overall, the trend in the cash conversion cycle for C.H. Robinson Worldwide, Inc. shows that the company has demonstrated improvements in managing its working capital over the past five years, with 2023 showing a particularly efficient conversion cycle.