Kirby Corporation (KEX)

Based on the data provided for Kirby Corp.'s liquidity ratios over the past five years, we can observe the following trends:

1. Current Ratio:
- The current ratio measures the company's ability to meet its short-term obligations with its current assets.
- Kirby Corp.'s current ratio has fluctuated over the years, ranging from 1.68 in 2023 to 2.25 in 2020.
- A current ratio above 1 indicates that the company has more current assets than current liabilities, with a higher ratio generally considered more favorable.
- Although the current ratio has trended downwards in recent years, it remains above 1 across all years, indicating that the company has sufficient current assets to cover its short-term liabilities.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets.
- Kirby Corp.'s quick ratio has also shown variability, ranging from 1.01 in 2023 to 1.58 in 2020.
- Similar to the current ratio, a quick ratio above 1 signifies the company's ability to meet short-term obligations without relying on the sale of inventory.
- While the quick ratio has decreased over the years, it remains above 1, suggesting that Kirby Corp. has a sufficient level of highly liquid assets to cover its immediate liabilities.

3. Cash Ratio:
- The cash ratio is the most conservative measure of liquidity, focusing solely on the company's ability to cover current liabilities with its cash and cash equivalents.
- Kirby Corp.'s cash ratio has varied significantly, from 0.15 in 2023 to 0.30 in 2020.
- A cash ratio below 1 indicates that the company may not have enough cash to cover its short-term liabilities.
- Although the cash ratio has fluctuated, it has generally remained below 1, implying that Kirby Corp. may need to rely on other current assets besides cash to meet its immediate obligations.

In summary, Kirby Corp. has maintained relatively healthy liquidity positions over the years, as indicated by its current, quick, and cash ratios staying above 1. However, the decreasing trend in these ratios signals a potential need for the company to monitor its liquidity position closely to ensure it can readily meet its short-term financial commitments.

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Additional liquidity measure

Kirby Corp.'s cash conversion cycle has exhibited fluctuating trends over the past five years. In 2023, the company's cash conversion cycle decreased to 68.32 days from 78.38 days in 2022, indicating an improvement in its management of working capital. This suggests that Kirby Corp. was able to convert its investments in inventory and receivables into cash more efficiently in 2023.

Comparing to the previous years, the trend shows that the cash conversion cycle was at its peak in 2020 at 100.89 days, which reflects a prolonged period for converting raw materials into finished goods, selling them, and collecting cash from customers. The company managed to significantly reduce this number in 2023.

In 2019, Kirby Corp. had the lowest cash conversion cycle of 62.16 days, indicating efficient working capital management during that year. It is worth noting that a lower cash conversion cycle is generally considered favorable as it indicates that the company is able to generate cash quickly from its operational activities.

Overall, Kirby Corp.'s cash conversion cycle has experienced both improvements and fluctuations over the years, and the decreasing trend in 2023 suggests that the company has been successful in enhancing its working capital efficiency.