Norfolk Southern Corporation (NSC)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 0.90 0.73 0.63 0.68 1.24 1.08 0.68 0.75 0.76 0.97 1.10 0.96 0.86 1.13 1.08 1.02 1.07 1.29 1.21 0.90
Quick ratio 0.76 0.62 0.50 0.54 1.03 0.93 0.55 0.61 0.61 0.85 0.95 0.84 0.72 2.53 2.24 2.47 2.57 1.12 1.02 0.67
Cash ratio 0.46 0.27 0.18 0.19 0.60 0.52 0.19 0.20 0.17 0.43 0.48 0.50 0.33 2.14 1.91 2.05 2.18 0.68 0.59 0.27

Based on the provided data, the liquidity ratios of Norfolk Southern Corporation have exhibited fluctuations over the reporting periods.

The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, shows a general trend of inconsistency but with a slight tendency to improve towards the end of the sample period. The current ratio was lowest at 0.63 in June 2024 and highest at 1.29 in September 2020. It closed at 0.90 in December 2024.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, tells a similar story with fluctuations. The quick ratio ranged from a low of 0.50 in June 2024 to a peak of 2.57 in December 2020. It stood at 0.76 at the end of December 2024.

The cash ratio, which indicates the company's ability to cover its current liabilities with its cash and cash equivalents, showcases varying levels of liquidity. It was at its lowest at 0.17 in December 2022 and reached its highest at 2.18 in December 2020. The cash ratio closed at 0.46 in December 2024.

In summary, the liquidity ratios of Norfolk Southern Corporation have displayed fluctuations over the periods analyzed, indicating varying levels of short-term liquidity and ability to meet current obligations. Analyzing these ratios holistically gives a clearer picture of the company's liquidity position and helps in assessing the potential risks associated with its short-term financial obligations.

See also:

Norfolk Southern Corporation Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days -81.17 -79.53 -70.22 -70.02 -87.06 -70.54 -67.77 -56.56 -57.08 -76.10 -62.79 -61.17 -91.57 -76.77 -69.08 -63.10 -65.64 -85.93 -80.47 -72.03

The cash conversion cycle of Norfolk Southern Corporation has shown a consistent trend of negative values, indicating efficient management of cash flow and working capital. Over the period from March 31, 2020, to December 31, 2024, the cash conversion cycle has ranged from -91.57 days to -56.56 days.

A negative cash conversion cycle signifies that Norfolk Southern Corporation is able to collect cash from its sales and convert inventory into cash before it has to pay its suppliers. This efficient cycle implies strong liquidity management and effective control over operating capital, allowing the company to optimize its working capital position.

The decreasing trend in the cash conversion cycle from 2020 to 2024 indicates improving efficiency in managing the company's cash flow and working capital. A shorter cash conversion cycle means the company is able to convert its investments in inventory and accounts receivable back into cash at a faster rate.

Overall, the consistently negative cash conversion cycle of Norfolk Southern Corporation reflects its ability to efficiently manage its working capital and generate cash flows from its operating activities. It suggests the company's effective management of receivables, inventory, and payables, which is essential for maintaining financial stability and supporting future growth.