Hub Group Inc (HUBG)

The liquidity ratios of Hub Group, Inc. provide insights into the company's ability to meet its short-term financial obligations.

The current ratio, which measures the company's ability to cover its current liabilities with its current assets, has been relatively consistent over the past five years, ranging from 1.26 to 1.53. The current ratio for 2023 stands at 1.29, indicating that the company has $1.29 in current assets for every $1 in current liabilities. This suggests that Hub Group, Inc. has a reasonable level of liquidity to meet its short-term obligations.

Similarly, the quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Hub Group, Inc.'s quick ratio has mirrored its current ratio, remaining stable between 1.26 and 1.53 over the five-year period. The quick ratio for 2023 matches the current ratio at 1.29, indicating that the company has sufficient liquid assets to cover its current liabilities quickly.

The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents to cover current liabilities, shows more fluctuations over the years. The cash ratio for Hub Group, Inc. has ranged from 0.28 to 0.49, with a notable increase to 0.49 in 2022 followed by a decline to 0.37 in 2023. The decrease in the cash ratio from the previous year suggests that the company may have fewer liquid cash reserves available to meet its short-term obligations.

Overall, based on the liquidity ratios provided, Hub Group, Inc. maintains a relatively stable liquidity position, with the ability to cover its short-term liabilities using its current assets. However, the slight decrease in the cash ratio in 2023 may warrant further monitoring to ensure the company's ability to handle unforeseen financial challenges.

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Additional liquidity measure

The cash conversion cycle of Hub Group, Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle improved significantly to 10.20 days compared to 19.67 days in 2022 and 16.81 days in 2021. This suggests that the company has been more efficient in managing its working capital and converting its resources into cash during the most recent year.

However, looking back further, the company's cash conversion cycle was considerably higher in 2020 and 2019, standing at 54.32 days and 44.46 days, respectively. This indicates that there were previously longer periods between the company's investment in inventory and receiving cash from sales.

Overall, the downward trend in the cash conversion cycle indicates that Hub Group, Inc. has made improvements in its working capital management and efficiency of its operations in recent years, leading to a shorter period for converting its investments and resources into cash.