JB Hunt Transport Services Inc (JBHT)

JB Hunt Transport Services Inc's liquidity ratios have shown a mixed trend over the years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, decreased from 1.65 in 2020 to 1.06 in 2024. This decline indicates a potential weakening liquidity position, as the company may have fewer current assets to meet its current liabilities.

Similarly, the quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. JB Hunt's quick ratio dropped from 0.28 in 2020 to 0.03 in 2022, and remained at that level through 2024. This significant decrease suggests that the company may have limited liquid assets available to cover its immediate liabilities without relying on inventory.

The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, mirrored the trend of the quick ratio, declining from 0.28 in 2020 to 0.03 in 2022 and remaining at that level thereafter. This indicates that JB Hunt may have a very low level of cash reserves relative to its short-term obligations.

Overall, the declining trend in all three liquidity ratios suggests that JB Hunt Transport Services Inc may face challenges in meeting its short-term financial obligations without relying heavily on inventory or external financing. It is important for the company to closely monitor its liquidity position and take necessary measures to improve it in order to maintain financial stability and operational continuity.

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Additional liquidity measure

The cash conversion cycle of JB Hunt Transport Services Inc has fluctuated over the years as follows:
- In 2020, the company had a cash conversion cycle of 1.06 days.
- By the end of 2021, the cash conversion cycle decreased to 0.89 days, indicating an improvement in efficiency.
- However, by the end of 2022, there was a slight increase in the cash conversion cycle to 1.20 days.
- In 2023, the cash conversion cycle further increased to 1.48 days, reflecting a lengthening cycle.
- Lastly, by the end of 2024, the cash conversion cycle stood at 1.52 days, showing a continued increase in the time it takes for the company to convert its investments in inventory and other resources back into cash.

Overall, JB Hunt Transport Services Inc's cash conversion cycle has shown fluctuations, with some years demonstrating improved efficiency while others indicating a lengthening cycle, which may warrant further investigation into the company's working capital management practices.