Ryder System Inc (R)

Ryder System, Inc.'s liquidity ratios show fluctuations over the past five years. The current ratio has been on a declining trend, from 0.59 in 2019 to 0.62 in 2023, indicating a decrease in short-term liquidity. This ratio suggests that the company may face challenges in meeting its short-term obligations with its current assets alone.

Similarly, the quick ratio has also shown a decreasing trend, from 0.56 in 2019 to 0.62 in 2023. This ratio excludes inventory from current assets, providing a more stringent measure of liquidity. The decreasing trend indicates a potential reduction in the company's ability to cover immediate liabilities without relying on inventory.

The cash ratio, on the other hand, has shown variations with a significant increase in 2021 to 0.29, after which it decreased to 0.15 in both 2022 and 2023. This ratio indicates the proportion of cash and cash equivalents to cover current liabilities. Despite the fluctuations, the low cash ratio values suggest that Ryder System, Inc. may have limited cash resources to meet its short-term obligations.

Overall, the liquidity ratios depict a potential liquidity challenge for Ryder System, Inc., as indicated by the declining current and quick ratios over the years, along with the relatively low cash ratio values. It is essential for the company to closely monitor and manage its liquidity position to ensure it can meet its short-term financial commitments effectively.

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Additional liquidity measure

The cash conversion cycle (CCC) of Ryder System, Inc. has shown a generally improving trend over the last five years. The CCC decreased from 25.41 days in 2019 to 21.04 days in 2023. This indicates that the company has been able to manage its cash resources more efficiently over the years.

A lower CCC suggests that Ryder System, Inc. is taking less time to convert its investments in inventory and accounts receivable into cash, thereby improving its liquidity position. This can be a positive sign of effective working capital management and operational efficiency within the company.

The decreasing trend in the CCC also suggests that Ryder System, Inc. may have been successful in managing its inventory levels, collecting receivables in a timely manner, and optimizing its payment cycles to suppliers. By streamlining these processes, the company is likely reducing the risk of cash flow disruptions and improving its overall financial health.

Overall, the improving trend in Ryder System, Inc.'s cash conversion cycle indicates that the company has been enhancing its working capital management practices and operating efficiency over the past five years, which can contribute to its financial stability and sustainability in the long term.