Norfolk Southern Corporation (NSC)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,641,000 | 1,568,000 | 456,000 | 839,000 | 1,115,000 |
| Short-term investments | US$ in thousands | — | — | — | — | 3,590,000 |
| Receivables | US$ in thousands | 1,069,000 | 1,147,000 | 1,148,000 | 976,000 | 848,000 |
| Total current liabilities | US$ in thousands | 3,545,000 | 2,632,000 | 2,649,000 | 2,521,000 | 2,160,000 |
| Quick ratio | 0.76 | 1.03 | 0.61 | 0.72 | 2.57 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,641,000K
+ $—K
+ $1,069,000K)
÷ $3,545,000K
= 0.76
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. A quick ratio above 1 indicates that a company has enough liquid assets to cover its current liabilities.
Looking at the data provided for Norfolk Southern Corporation:
- As of December 31, 2020, the quick ratio was 2.57, indicating a strong ability to cover short-term obligations with liquid assets.
- However, by December 31, 2021, the quick ratio decreased significantly to 0.72, suggesting a potential liquidity strain.
- This trend continued into December 31, 2022, with a further decrease to 0.61, indicating a further decline in the ability to cover short-term liabilities with liquid assets.
- By December 31, 2023, there was a slight improvement in the quick ratio to 1.03, which may hint at better management of short-term liquidity.
- However, by December 31, 2024, the quick ratio dropped again to 0.76, indicating that there may still be some challenges in meeting short-term obligations with available liquid assets.
In summary, Norfolk Southern Corporation's quick ratio fluctuated over the years, with periods of strong liquidity and others where the company may have faced challenges in meeting short-term obligations with readily available assets.
Peer comparison
Dec 31, 2024