Knight Transportation Inc (KNX)

The liquidity ratios of Knight-Swift Transportation Holdings Inc suggest varying levels of short-term financial health over the past eight quarters.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has shown fluctuations. In Q4 2023, the current ratio decreased to 0.94 from 1.02 in Q3 2023, indicating a potential weakening of the company's ability to meet its short-term liabilities. This downward trend contrasts with the higher current ratios observed in Q2 and Q1 2023, which were 1.99 and 1.59 respectively. Similarly, the current ratio in Q4 2022 was 1.67, suggesting tighter liquidity conditions compared to the earlier quarters of 2023.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also displayed fluctuations. In Q4 2023, the quick ratio decreased to 0.73 from 0.82 in Q3 2023, signaling a potential decrease in the company's ability to meet its short-term obligations without relying on selling inventory. However, the quick ratios in Q2 and Q1 2023 were higher at 1.66 and 1.31, demonstrating better short-term liquidity positions during those quarters.

Furthermore, the cash ratio, which specifically assesses the company's ability to cover its current liabilities with its cash and cash equivalents, exhibited a similar fluctuating pattern. In Q4 2023, the cash ratio decreased to 0.20 from 0.23 in Q3 2023, indicating a potential decrease in the company's direct cash coverage of short-term obligations. This contrasts with the higher cash ratios in Q2 and Q1 2023, which were 0.89 and 0.39 respectively, suggesting stronger cash liquidity during those quarters.

Overall, the liquidity ratios of Knight-Swift Transportation Holdings Inc indicate varying levels of short-term financial health over the past eight quarters, with fluctuations in current, quick, and cash ratios reflecting changes in the company's ability to meet its short-term obligations. It is important for stakeholders to closely monitor these ratios to assess the company's liquidity position and financial stability.

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Additional liquidity measure

The cash conversion cycle of Knight-Swift Transportation Holdings Inc has shown fluctuations over the quarters analyzed. In Q4 2023, the company had a cash conversion cycle of 48.78 days, indicating that it takes approximately 48.78 days for Knight-Swift to convert its investments in inventory and other resources into cash from sales. This was a slight improvement from the previous quarter, where the cycle was 54.14 days.

In Q2 2023, the cash conversion cycle decreased to 38.98 days, reflecting a more efficient management of working capital compared to Q1 2023, which had a cycle of 41.88 days. However, it is important to note that Q2 2023 had a notably lower cycle compared to the previous quarters, indicating a potential improvement in the company's operations or adjustments in its supply chain management.

In contrast, Q3 2022 and Q4 2022 presented negative cash conversion cycles of -98.56 days and -23.58 days, respectively. These negative cycles suggest that Knight-Swift was able to convert its investments into cash at a faster rate than it took to pay off its suppliers and creditors during those quarters. This could indicate efficient working capital management or possibly aggressive payment terms negotiated with suppliers.

Overall, the analysis of Knight-Swift Transportation Holdings Inc's cash conversion cycles reveals fluctuations in the efficiency of its working capital management over the quarters, with variations in the time it takes for the company to convert its resources into cash. Further investigation into the underlying factors driving these fluctuations could provide insights into the company's operational performance and financial health.