Landstar System Inc (LSTR)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.00 | 2.08 | 1.98 | 1.83 | 1.64 | 1.58 | 1.54 | 1.62 | 1.51 | 1.67 | 1.71 | 1.72 | 1.50 | 1.77 | 1.77 | 1.76 | 1.80 | 2.01 | 1.98 | 2.00 |
| Quick ratio | 1.90 | 1.95 | 1.83 | 1.74 | 1.55 | 1.45 | 1.37 | 1.48 | 1.39 | 1.51 | 1.59 | 1.64 | 1.31 | 1.65 | 1.63 | 1.66 | 1.70 | 1.89 | 1.85 | 1.91 |
| Cash ratio | 0.80 | 0.74 | 0.60 | 0.52 | 0.45 | 0.24 | 0.12 | 0.19 | 0.25 | 0.32 | 0.33 | 0.39 | 0.36 | 0.47 | 0.60 | 0.45 | 0.64 | 0.65 | 0.60 | 0.64 |
Landstar System Inc's liquidity ratios show a generally positive trend over the periods analyzed. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been consistently above 1, indicating a healthy liquidity position. The company has improved its current ratio from 1.51 in December 2021 to 2.00 in December 2023, showing a strengthening ability to meet its short-term obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown improvement over time. Landstar System Inc's quick ratio has generally remained above 1, reflecting the company's ability to meet its short-term liabilities with its most liquid assets. The quick ratio has increased from 1.39 in December 2021 to 1.90 in December 2023, indicating enhanced liquidity.
The cash ratio, which is the most conservative liquidity measure as it considers only cash and cash equivalents relative to current liabilities, has also demonstrated a positive trend. While the cash ratio has fluctuated over the periods analyzed, it has generally been above 0.5, suggesting Landstar System Inc maintains a solid level of cash reserves relative to its short-term obligations.
Overall, Landstar System Inc's liquidity ratios paint a favorable picture of its ability to meet its short-term financial obligations and withstand unforeseen challenges. The company's consistent improvement in liquidity ratios reflects effective management of its working capital and cash resources.
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -43.28 | -59.12 | -64.17 | -67.91 | -428.29 | -519.69 | -536.53 | -517.56 | -521.46 | -515.60 | -491.67 | -435.44 | -389.61 | -348.74 | -280.94 | -281.82 | -297.30 | -314.08 | -312.40 | -283.10 |
The cash conversion cycle of Landstar System Inc has been fluctuating over the past few years, showing both positive and negative values. A negative cash conversion cycle indicates that the company is able to generate cash from its operating cycle before paying its suppliers.
Throughout the available data, Landstar System Inc has generally maintained a negative cash conversion cycle, indicating efficient management of working capital. However, it is essential to note that the cycle has varied significantly, ranging from -517.56 days to -280.94 days, with the latest reported figure being -43.28 days as of December 31, 2023.
The substantial improvements in the cash conversion cycle over the years suggest that Landstar System Inc has been effectively managing its inventory turnover, accounts receivable collection, and accounts payable payment processes. This efficient management of working capital indicates the company's ability to convert its investments in inventory and receivables into cash quickly and effectively, ultimately improving its liquidity position.
However, it is also important to consider that a very low or negative cash conversion cycle may also indicate aggressive management tactics that could potentially lead to risks associated with underinvestment in working capital. Therefore, ongoing monitoring and strategic adjustments will be crucial for Landstar System Inc to sustain its efficient cash conversion cycle while managing any associated risks effectively.