Republic Services Inc (RSG)

Republic Services Inc's liquidity ratios have shown some fluctuations over the years.

1. Current Ratio: The current ratio measures the company's ability to pay its short-term obligations using its current assets. Republic Services Inc's current ratio has ranged between 0.56 to 0.71 over the past five years. The current ratio has generally been below 1, indicating that the company may have had difficulty meeting its short-term obligations with its current assets alone. A current ratio below 1 may raise concerns about the company's liquidity and ability to cover its immediate liabilities.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, excludes inventory from current assets to provide a more stringent measure of liquidity. Republic Services Inc's quick ratio has hovered around 0.07 to 0.08 during the period under review. A quick ratio below 1 suggests that the company may have had challenges covering its short-term liabilities without relying on the sale of inventory. This could indicate potential liquidity issues.

3. Cash Ratio: The cash ratio specifically focuses on the ability of a company to cover its short-term liabilities with only its cash and cash equivalents. Republic Services Inc's cash ratio has remained constant at 0.07 to 0.08 across the years. A cash ratio of less than 1 implies that the company may not have enough cash on hand to meet its immediate obligations, which could signal liquidity challenges.

In summary, Republic Services Inc's liquidity ratios, including the current ratio, quick ratio, and cash ratio, indicate a consistent struggle to cover short-term obligations with current assets and cash alone. This suggests that the company may need to improve its liquidity management to ensure it can meet its short-term financial commitments effectively.

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Additional liquidity measure

The cash conversion cycle of Republic Services Inc has shown a fluctuation over the years. As of December 31, 2020, the company's cash conversion cycle was at 3.54 days, indicating that it took approximately 3.54 days for the company to convert its investments in raw materials and other resources into cash inflows from sales.

By December 31, 2021, the cash conversion cycle increased to 3.91 days, reflecting a slight delay in the company's conversion of inputs into cash. This trend continued as the cycle extended to 4.30 days by December 31, 2022. However, there was a decrease in the cash conversion cycle by December 31, 2023, to 3.97 days, suggesting an improvement in the company's efficiency in managing its working capital.

As of December 31, 2024, the cash conversion cycle further decreased to 3.83 days, indicating that Republic Services Inc was able to shorten the time it takes to convert its investments into cash. Overall, the company's cash conversion cycle has shown variability, with fluctuations reflecting changes in the efficiency of its operations and management of working capital.