CSX Corporation (CSX)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.86 | 1.05 | 1.56 | 1.73 | 2.20 |
| Quick ratio | 0.31 | 0.45 | 0.84 | 1.04 | 1.55 |
| Cash ratio | 0.31 | 0.45 | 0.84 | 1.04 | 1.55 |
Based on the data provided for CSX Corporation, the company's liquidity ratios have shown a decreasing trend over the years. The current ratio, which measures the company's ability to cover short-term obligations with current assets, decreased from 2.20 in 2020 to 0.86 in 2024. This indicates a potential weakening in CSX's short-term liquidity position.
Similarly, the quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. CSX's quick ratio declined from 1.55 in 2020 to 0.31 in 2024, signaling a significant decrease in the company's ability to meet its short-term obligations without relying on inventory.
Lastly, the cash ratio, which specifically looks at the company's ability to cover current liabilities with available cash and cash equivalents, also saw a downward trend from 1.55 in 2020 to 0.31 in 2024. This suggests that CSX may have limited cash reserves relative to its current liabilities as of 2024.
Overall, the decreasing trend in all three liquidity ratios indicates a potential liquidity challenge for CSX Corporation, which may necessitate closer monitoring and management of its short-term financial obligations in the coming periods. Additional analysis of the company's cash flows and working capital management practices could provide further insights into its liquidity position.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 16.43 | 17.83 | 13.73 | 16.76 | 17.72 |
CSX Corporation's cash conversion cycle has shown fluctuations over the past five years.
As of December 31, 2020, the cash conversion cycle was 17.72 days, indicating that on average it took the company around 17.72 days to convert its investments in inventory and accounts receivable into cash.
In 2021, the cash conversion cycle decreased to 16.76 days, signaling that the company's efficiency in managing its working capital improved slightly.
By December 31, 2022, the cash conversion cycle further decreased to 13.73 days, suggesting a more efficient management of inventory and accounts receivable, enabling the company to convert its assets into cash at a faster rate.
However, in 2023, the cash conversion cycle increased to 17.83 days, indicating a potential delay in converting inventory and accounts receivable into cash compared to the previous year.
In the most recent year, December 31, 2024, the cash conversion cycle dropped to 16.43 days, signaling an improvement in the company's ability to manage its working capital efficiently.
Overall, CSX Corporation has shown some fluctuations in its cash conversion cycle over the past five years, with periods of improvement and slight setbacks. It is important for the company to continue monitoring and managing its working capital effectively to enhance its cash conversion efficiency.