Forward Air Corporation (FWRD)

Forward Air Corporation's current ratio has shown a relatively stable trend over the past five years, ranging from 1.23 to 1.80. This indicates that the company's ability to meet its short-term obligations with its current assets has fluctuated but generally remains at acceptable levels.

In terms of the quick ratio, Forward Air's ability to meet its short-term obligations with its most liquid assets (excluding inventories) has also been consistent, with values ranging from 0.23 to 0.51. This suggests that the company may sometimes struggle to cover its immediate liabilities using only its most liquid assets, but overall, it has improved over the years.

The cash ratio, which focuses solely on the company's cash and cash equivalents relative to current liabilities, has mirrored the quick ratio's trend, indicating that Forward Air's cash position has also experienced fluctuations but has generally improved over the years.

Overall, the liquidity ratios of Forward Air Corporation suggest that the company has managed to maintain a decent ability to meet its short-term obligations, although there have been some fluctuations that may warrant further monitoring to ensure continued financial stability.

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Additional liquidity measure

The cash conversion cycle of Forward Air Corporation has seen a significant improvement over the years. As of December 31, 2020, the company had a cash conversion cycle of 7.37 days, indicating that it took approximately 7.37 days for the company to convert its investments in inventory and other resources into cash inflows.

Subsequently, in the following years, the cash conversion cycle has improved drastically, reaching 0.00 days by December 31, 2021, and remaining at that level through 2024. This signifies that the company has efficiently managed its working capital, reducing the time it takes to convert its resources into cash, which can have positive implications for the company's liquidity and overall financial health.

The trend towards a shorter cash conversion cycle indicates that Forward Air Corporation has streamlined its operations, improved inventory management, and optimized its accounts receivable and accounts payable processes. This enhanced efficiency in the cash conversion cycle can potentially lead to improved cash flow management and better utilization of resources for future investments and growth opportunities.