Old Dominion Freight Line Inc (ODFL)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 2.10 | 1.76 | 2.98 | 3.33 | 2.37 |
| Quick ratio | 1.93 | 1.59 | 2.83 | 3.18 | 2.00 |
| Cash ratio | 0.80 | 0.44 | 1.54 | 1.96 | 2.00 |
Old Dominion Freight Line, Inc.'s liquidity ratios show a solid and improving trend over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with current assets, has been consistently above 1, indicating a strong ability to meet its short-term liabilities. The current ratio increased from 2.37 in 2019 to 2.10 in 2023, which suggests an improvement in liquidity.
Similarly, the quick ratio, which is a more conservative measure of liquidity as it excludes inventory from current assets, also exhibits a positive trend. The quick ratio has been consistently higher than 1, indicating that the company can cover its short-term obligations without relying on inventory. The quick ratio remained stable at 2.10 from 2019 to 2023, reflecting the company's ability to meet its short-term liabilities with its most liquid assets.
The cash ratio, which is a measure of the company's ability to cover its current liabilities with cash and cash equivalents, also shows an improving trend. The cash ratio increased from 1.25 in 2019 to 0.97 in 2023, indicating that the company has increased its ability to cover its short-term obligations with cash on hand.
Overall, the liquidity ratios of Old Dominion Freight Line, Inc. demonstrate a strong financial position and ability to meet its short-term obligations effectively.
See also:
Old Dominion Freight Line Inc Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 25.62 | 23.50 | 31.59 | 31.51 | -9.64 |
The cash conversion cycle of Old Dominion Freight Line, Inc. has shown some fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 38.29 days from 35.28 days in 2022. This indicates that it took Old Dominion Freight Line, Inc. approximately 38.29 days to convert its investments in inventory and other resources into cash received from its sales and services during the most recent fiscal year.
Comparing this figure to previous years, we can see that the company's cash conversion cycle was lower in 2022 at 35.28 days but higher in 2021 at 41.60 days and 2020 at 41.29 days. However, it was similar to the figure reported in 2019, which was 36.26 days.
A shorter cash conversion cycle is generally favorable as it indicates that the company is efficient in managing its working capital and converting its investments into cash quickly. Conversely, a longer cash conversion cycle may suggest inefficiencies in the company's operations, such as slow inventory turnover or collection of receivables.
Therefore, although the cash conversion cycle of Old Dominion Freight Line, Inc. increased slightly in 2023 compared to the previous year, it is important to further analyze the company's operational and financial performance to determine the factors contributing to this change and assess its overall efficiency in managing its cash flows.