Old Dominion Freight Line Inc (ODFL)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	433,799	186,312	462,564	401,430	403,571
Short-term investments	US$ in thousands	0	49,355	254,433	330,274	330,274
Total current liabilities	US$ in thousands	544,658	529,793	464,234	373,130	366,085
Cash ratio		0.80	0.44	1.54	1.96	2.00

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($433,799K + $0K) ÷ $544,658K
= 0.80

The cash ratio of Old Dominion Freight Line, Inc. has fluctuated over the past five years, as evidenced by the following figures: 0.97 in 2023, 0.62 in 2022, 1.69 in 2021, 2.11 in 2020, and 1.25 in 2019.

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations.

In 2023, the cash ratio of 0.97 signifies that Old Dominion Freight Line, Inc. has nearly one dollar in cash and cash equivalents for every dollar of current liabilities, indicating a relatively healthy liquidity position. However, the ratio has decreased compared to the previous year, suggesting a potential decrease in the company's ability to cover its short-term obligations solely with cash on hand.

It is important to investigate further to understand the reasons behind the fluctuations in the cash ratio and assess whether they are indicative of underlying financial strengths or weaknesses in the company's operations or financial management.