CSX Corporation (CSX)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.05 | 1.56 | 1.73 | 2.20 | 1.52 |
| Quick ratio | 0.88 | 1.38 | 1.55 | 2.00 | 1.37 |
| Cash ratio | 0.45 | 0.84 | 1.04 | 1.55 | 0.91 |
CSX Corp.'s liquidity ratios have exhibited a declining trend over the past five years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, decreased from 2.20 in 2020 to 1.05 in 2023. This indicates that CSX Corp. may have less flexibility in meeting its short-term liabilities compared to previous years.
Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also saw a decrease from 2.05 in 2020 to 0.91 in 2023. This suggests that CSX Corp. may have a reduced ability to cover its immediate liabilities without relying on inventory.
The cash ratio, which specifically measures the company's ability to cover current liabilities with cash and cash equivalents, also declined from 1.60 in 2020 to 0.48 in 2023. This indicates a decreasing ability to settle short-term obligations solely with cash on hand.
Overall, the decreasing trend in CSX Corp.'s liquidity ratios raises concerns about the company's short-term financial health and ability to meet its obligations promptly. It may be important for the company to closely monitor its liquidity position and take appropriate measures to improve its liquidity management.
See also:
CSX Corporation Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -25.54 | -28.99 | -28.86 | -28.64 | -45.02 |
The cash conversion cycle of CSX Corp. has exhibited some variability over the past five years. The cycle represents the number of days it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From 2019 to 2023, the cash conversion cycle for CSX Corp. has ranged from a low of 30.15 days in 2019 to a high of 34.69 days in 2023. This indicates that, on average, it took the company slightly longer to turn its investment in resources into cash in 2023 compared to the previous years.
A longer cash conversion cycle can suggest inefficiencies in managing inventory, collecting receivables, or paying suppliers. Conversely, a shorter cycle can indicate effective working capital management.
Overall, while the cash conversion cycle for CSX Corp. has fluctuated over the years, it is important for the company to continue monitoring and improving this metric to ensure optimal efficiency in its cash flow management processes.