Landstar System Inc (LSTR)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 2.00 | 1.64 | 1.51 | 1.50 | 1.80 |
| Quick ratio | 1.90 | 1.55 | 1.39 | 1.31 | 1.70 |
| Cash ratio | 0.80 | 0.45 | 0.25 | 0.36 | 0.64 |
Landstar System Inc's liquidity ratios have shown fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, improved steadily from 2019 to 2021, reaching its peak at 2.00 in 2023. This indicates that Landstar System Inc has been able to enhance its short-term liquidity position over the years.
The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, also displayed an upward trend from 2019 to 2021, peaking at 1.90 in 2023. This suggests that Landstar System Inc has a better ability to meet its short-term obligations using its most liquid assets.
On the other hand, the cash ratio, which is the most conservative measure of liquidity, demonstrated fluctuations over the same period. However, there was a significant improvement in 2023 with the cash ratio standing at 0.80, indicating that Landstar System Inc holds a higher level of cash relative to its current liabilities compared to previous years.
Overall, the liquidity ratios of Landstar System Inc have shown improvement in recent years, particularly in 2023. This enhanced liquidity position suggests a stronger ability to meet its short-term financial obligations and indicates a more stable financial condition for the company.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -325.01 | -428.29 | -521.46 | -389.61 | -297.30 |
The cash conversion cycle of Landstar System Inc has exhibited a decreasing trend over the past five years, indicating improved efficiency in managing its cash flows. The company's cash conversion cycle reached its lowest point in 2023 at -325.01 days, which is a significant improvement from the highest cycle of -521.46 days in 2021.
A negative cash conversion cycle implies that Landstar System Inc is able to generate cash from its operations before having to pay its suppliers and creditors. This can be a favorable indicator of the company's liquidity and working capital management.
Overall, the trend of decreasing cash conversion cycle suggests that Landstar System Inc has been able to optimize its operating cycle, reduce the time it takes to convert inventory into receivables, and manage its payables efficiently.