Knight Transportation Inc (KNX)

Knight Transportation Inc's liquidity ratios show fluctuations over the years.

- The current ratio has gradually improved from 1.10 in 2020 to 1.67 in 2022, indicating the company's ability to meet its short-term obligations with its current assets. However, there was a significant decrease to 0.85 in 2024, which may raise concerns about potential liquidity issues.

- The quick ratio, also known as the acid-test ratio, measures the company's ability to cover its short-term liabilities with its most liquid assets. Knight Transportation Inc's quick ratio has been relatively low, hovering between 0.09 and 0.25 over the years, suggesting a limited ability to cover immediate obligations without relying on inventory.

- The cash ratio, which is a more stringent measure of liquidity, has also shown a similar pattern as the quick ratio, ranging from 0.09 to 0.25. While the company has a modest amount of cash to cover its current liabilities, the ratios indicate a dependency on other liquid assets to meet short-term obligations.

Overall, Knight Transportation Inc's liquidity ratios demonstrate some level of liquidity and ability to meet short-term obligations, but the declining trend in certain ratios, particularly in 2024, calls for a closer examination of the company's cash management and potential liquidity risks.

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Additional liquidity measure

The cash conversion cycle of Knight Transportation Inc has shown fluctuations over the years. As of December 31, 2020, the company's cash conversion cycle was 14.75 days, indicating a relatively efficient management of cash flows from operations, inventory, and receivables.

However, there was a slight increase in the cash conversion cycle to 15.27 days by December 31, 2021, suggesting a slight delay in converting investments in operating activities into cash receipts.

The cycle experienced a significant increase to 22.06 days by December 31, 2022, indicating a prolonged time taken to convert resources into cash, possibly due to challenges in managing working capital efficiently.

By December 31, 2023, Knight Transportation Inc was able to bring down its cash conversion cycle to 18.46 days, reflecting an improvement in the efficiency of managing cash flows, inventory, and receivables.

Remarkably, as of December 31, 2024, the cash conversion cycle decreased to 0.00 days, which could possibly be due to a more streamlined process in converting investments into cash or an anomaly that requires further investigation and verification.

Overall, the trend in Knight Transportation Inc's cash conversion cycle shows both improvements and fluctuations, highlighting the importance of closely monitoring working capital management practices to optimize cash flows effectively.