Old Dominion Freight Line Inc (ODFL)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	108,676	433,799	186,312	462,564	401,430
Short-term investments	US$ in thousands	0	0	49,355	254,433	330,274
Total current liabilities	US$ in thousands	540,529	544,658	529,793	464,234	373,130
Cash ratio		0.20	0.80	0.44	1.54	1.96

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($108,676K + $0K) ÷ $540,529K
= 0.20

The cash ratio of Old Dominion Freight Line Inc has exhibited fluctuations over the past five years. It stood at 1.96 on December 31, 2020, indicating the company had sufficient cash to cover its current liabilities. However, by December 31, 2021, the ratio decreased to 1.54, implying a slight decline in the company's ability to meet its short-term obligations solely with its cash holdings.

A more significant drop was observed by December 31, 2022, with the cash ratio plummeting to 0.44. This sharp decline suggests a potential liquidity strain as the company's cash position relative to its current liabilities reduced substantially. Despite this, by December 31, 2023, the cash ratio showed some improvement, increasing to 0.80, albeit still below the levels seen in the previous years.

The most recent data point, December 31, 2024, shows the cash ratio decreasing further to 0.20, indicating a significant reduction in the proportion of cash available to cover short-term obligations. This declining trend in the cash ratio may raise concerns about Old Dominion Freight Line Inc's liquidity position and its ability to meet its immediate financial obligations through cash holdings alone.