Heartland Express Inc (HTLD)

Heartland Express, Inc.'s liquidity ratios demonstrate the company's ability to meet its short-term obligations and cover immediate financial commitments. The current ratio, which measures the company's ability to pay off its short-term liabilities with its current assets, has shown a declining trend over the past five years, from 2.39 in 2019 to 1.37 in 2023. While a ratio above 1 indicates the company can cover its obligations, a decreasing trend may signal potential liquidity concerns.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, mirrors the trend of the current ratio for Heartland Express, Inc. The consistent ratio of 1.37 indicates the company has a stable ability to meet short-term liabilities without relying on inventory.

The cash ratio has shown fluctuations but has generally decreased over the years, from 1.49 in 2019 to 0.46 in 2023. This ratio reflects the company's ability to cover its current liabilities with cash and cash equivalents alone. While a ratio above 1 is considered healthy, the declining trend may suggest that the company's cash position relative to its short-term obligations has weakened over time.

In summary, Heartland Express, Inc.'s liquidity ratios indicate a mixed picture. While the current and quick ratios remain above 1, suggesting the company can meet its short-term obligations, the declining trend in these ratios and the cash ratio may point towards a potential strain on liquidity over time. Monitoring these ratios closely and implementing strategies to strengthen the company's liquidity position may be crucial for long-term financial health and stability.

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Additional liquidity measure

The cash conversion cycle of Heartland Express, Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased significantly to 34.13 days from 53.90 days in 2022. This indicates that Heartland Express, Inc. was able to manage its cash more efficiently in the most recent year.

Comparing to 2021, the cash conversion cycle remained relatively stable in 2023, with only a slight decrease from 34.20 days to 34.13 days. This suggests that the company's operations were consistent in terms of cash collection, inventory management, and payment of suppliers over these two years.

In 2020, the company's cash conversion cycle was 31.44 days, slightly lower than in 2023. This indicates that Heartland Express, Inc. was able to convert its investments in inventory back to cash slightly faster in 2020 compared to 2023.

In 2019, the cash conversion cycle was 34.91 days, indicating that the company took longer to convert its investments in inventory into cash compared to the most recent years.

Overall, while there have been fluctuations in the cash conversion cycle over the five-year period, Heartland Express, Inc. has shown improvements in managing its cash conversion cycle in recent years, with a significant decrease in 2023 compared to the previous year.