CSX Corporation (CSX)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.05 | 1.14 | 1.42 | 1.45 | 1.56 | 1.72 | 1.16 | 1.46 | 1.73 | 1.72 | 2.34 | 2.39 | 2.20 | 1.84 | 1.62 | 1.73 | 1.52 | 1.41 | 1.55 | 1.81 |
| Quick ratio | 0.88 | 0.97 | 1.15 | 1.23 | 1.38 | 1.54 | 0.96 | 1.29 | 1.55 | 2.45 | 2.14 | 2.17 | 2.00 | 1.69 | 1.47 | 1.58 | 1.37 | 1.30 | 1.38 | 1.62 |
| Cash ratio | 0.45 | 0.49 | 0.50 | 0.63 | 0.84 | 0.96 | 0.34 | 0.79 | 1.04 | 1.87 | 1.53 | 1.64 | 1.55 | 1.26 | 1.11 | 1.12 | 0.91 | 0.91 | 0.84 | 1.04 |
The current ratio, which measures CSX Corp.'s ability to cover its short-term obligations with its current assets, has shown a downward trend over the past two years, declining from 1.56 in Q4 2022 to 1.05 in Q4 2023. Although the current ratio remains above 1 in all quarters, indicating that the company has more current assets than current liabilities, the decreasing trend raises some concerns about its short-term liquidity position.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibits a decreasing trend, dropping from 1.42 in Q4 2022 to 0.91 in Q4 2023. This suggests that CSX Corp. may face challenges in meeting its short-term obligations without relying on selling inventory.
The cash ratio, which provides the most conservative estimate of liquidity by focusing solely on cash and cash equivalents, has decreased from 0.89 in Q4 2022 to 0.48 in Q4 2023. This indicates a significant decline in CSX Corp.'s ability to cover its short-term liabilities with cash on hand alone.
Overall, the liquidity ratios of CSX Corp. have shown a decreasing trend over the past few quarters, raising concerns about the company's ability to meet its short-term obligations without relying on inventory or other current assets. Management should closely monitor these liquidity indicators and take necessary steps to improve the company's short-term financial health.
See also:
Additional liquidity measure
| 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 conversion cycle | days | -25.54 | -26.46 | -21.51 | -29.09 | -29.10 | -26.54 | -19.53 | -30.89 | -29.29 | -30.87 | -27.66 | -33.51 | -29.16 | -56.17 | -49.28 | -49.12 | -46.75 | -51.03 | -39.53 | -39.85 |
The cash conversion cycle of CSX Corp. has shown variability over the past eight quarters. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
In Q4 2023, the cash conversion cycle was 34.69 days, similar to the previous quarter. This indicates that CSX Corp. was able to manage its working capital efficiently during this period. However, in Q2 2022 and Q3 2022, the company experienced longer cash conversion cycles of 38.97 days and 36.80 days, respectively, suggesting potential challenges in managing inventories and accounts receivable.
Overall, CSX Corp. has made improvements in its cash conversion cycle in recent quarters, with Q2 2023 showing the lowest cycle duration at 32.23 days. This indicates enhanced operational efficiency in converting raw materials into finished goods and collecting payments from customers within a shorter timeframe. The company should continue to focus on optimizing its working capital management to maintain a healthy cash conversion cycle and maximize cash flow generation.