Expeditors International of Washington, Inc. (EXPD)

Expeditors International of Washington, Inc.'s current ratio, a measure of short-term liquidity, has generally been above 2 over the past few years, reflecting the company's ability to cover its current liabilities with its current assets. However, there was a slight decline in the current ratio from 2.42 on March 31, 2023, to 1.77 on December 31, 2024.

The quick ratio, which is a more stringent measure of liquidity excluding inventory from current assets, also shows a decreasing trend from 1.34 on March 31, 2023, to 0.56 on December 31, 2024. This indicates a potential weakening in the company's ability to meet its short-term obligations without relying on inventory.

The cash ratio, which assesses the company's ability to cover its current liabilities with cash and cash equivalents only, also follows a declining pattern from 1.34 on March 31, 2023, to 0.56 on December 31, 2024. This downward trend suggests that the company may have a reduced capacity to settle its immediate liabilities solely with cash reserves.

Overall, the declining trends in the quick ratio and cash ratio raise some concerns about Expeditors International of Washington, Inc.'s short-term liquidity position, despite the current ratio remaining relatively stable above 1.5. This indicates the importance of closely monitoring the company's liquidity levels to ensure its financial health and stability.

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Additional liquidity measure

The cash conversion cycle for Expeditors International of Washington, Inc. has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.

Initially, the company's cash conversion cycle was relatively stable, ranging between 7 to 13 days from March 2020 to March 2021. However, there was a notable increase in the cycle starting from June 2021, reaching a peak of 25.10 days by December 2021. This prolonged cycle could indicate delays in collecting receivables or an increase in the company's inventory holding period.

Subsequently, there was a significant improvement in the cash conversion cycle from December 2021 to March 2024, where the cycle decreased steadily to 0 days by December 2023 and maintained at 0 days for the rest of the periods. A cash conversion cycle of 0 days suggests that the company is able to convert its investments into cash almost immediately, which could be indicative of efficient operations and effective management of working capital.

Overall, the data indicates that Expeditors International of Washington, Inc. experienced a period of extended cash conversion cycle followed by a remarkable improvement, leading to a more efficient cash conversion process in the latter periods. This improvement may have positive implications for the company's liquidity and financial performance.