Kirby Corporation (KEX)

The liquidity ratios of Kirby Corporation show a mixed trend over the years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has ranged from a high of 2.25 in December 2020 to a low of 0.09 in December 2024. While the company had a comfortable level of current assets relative to current liabilities in earlier years, the ratio dropped significantly in 2024, potentially indicating challenges in meeting immediate obligations.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also experienced fluctuations. The quick ratio was at its highest in December 2022 at 0.13, but it dropped to 0.05 in December 2023 before slightly increasing to 0.09 in December 2024. This suggests that Kirby Corporation may have faced difficulties in covering short-term obligations with its most liquid assets in recent years.

The cash ratio, which indicates the proportion of current liabilities that can be covered by cash and cash equivalents, followed a similar pattern as the quick ratio. It was relatively stable at 0.18 in December 2020, decreased to 0.06 in December 2021, and then fluctuated between 0.05 and 0.13 in the following years. The cash ratio in December 2024 was reported at 0.09, indicating a slight improvement from the previous year.

Overall, the downward trend in the current ratio and the volatility in the quick ratio and cash ratio may raise concerns about Kirby Corporation's liquidity position and its ability to meet short-term obligations. It is essential for the company to closely monitor its liquidity levels and take necessary actions to maintain a healthy liquidity position in the future.

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Additional liquidity measure

The cash conversion cycle of Kirby Corporation has shown fluctuating trends over the past five years. In December 2020, the cash conversion cycle was 65.31 days, slightly decreasing to 64.79 days by December 2021. However, there was a significant increase in the cash conversion cycle to 74.51 days by December 2022. Subsequently, the figure decreased to 69.35 days by December 2023 and further improved to 58.91 days by December 2024. Overall, Kirby Corporation managed to reduce its cash conversion cycle from 2022 to 2024, indicating more efficient management of cash resources and working capital over this period. However, it is essential for the company to monitor and manage this cycle consistently to ensure optimal liquidity management and operational efficiency.