Republic Services Inc (RSG)

Based on the data provided, we can observe the following trends in Republic Services, Inc.'s liquidity ratios over the past eight quarters:

1. Current Ratio:
- The current ratio measures the company's ability to meet its short-term obligations with its current assets.
- Republic Services, Inc.'s current ratio has fluctuated between 0.56 and 0.76 over the period.
- The current ratio has generally remained below 1, indicating that the company may have had difficulty in meeting its short-term obligations with current assets alone.
- The ratio showed slight improvement in the most recent quarter, increasing to 0.76, but overall remains relatively low.

2. Quick Ratio:
- The quick ratio is a more stringent measure of liquidity as it excludes inventory from current assets.
- Republic Services, Inc.'s quick ratio has followed a similar trend to the current ratio, ranging from 0.54 to 0.72.
- Like the current ratio, the quick ratio has also been consistently below 1, which suggests potential difficulties in meeting short-term liabilities without relying on inventory.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, focusing solely on the ability to pay off short-term obligations with cash and cash equivalents.
- Republic Services, Inc.'s cash ratio has ranged from 0.06 to 0.10, with the company maintaining a relatively low level of cash compared to its short-term obligations.
- The cash ratio increased slightly in the most recent quarter to 0.10, indicating a small improvement in the company's ability to cover liabilities with cash.

Overall, the liquidity ratios of Republic Services, Inc. suggest that the company may have faced challenges in meeting its short-term obligations with its current assets alone, as indicated by consistently low current, quick, and cash ratios. Management should closely monitor these ratios and take appropriate actions to improve liquidity and ensure financial stability.

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Additional liquidity measure

The cash conversion cycle of Republic Services, Inc. has shown varying trends over the past eight quarters. In Q4 2023, the company achieved a negative cash conversion cycle of -5.02 days, indicating that it was able to convert its inventory into cash and collect receivables before paying its suppliers. This efficient cash conversion cycle suggests strong working capital management.

However, in the preceding quarters, the company's cash conversion cycle fluctuated. In Q3 2023 and Q1 2023, the company had positive cash conversion cycles of 2.76 days and 10.90 days, respectively. This indicates that Republic Services, Inc. took longer to convert its investments in inventory and accounts receivable into cash during these periods.

In contrast, Q2 2023 exhibited a moderate cash conversion cycle of 5.75 days, reflecting an improvement from the previous quarter. The trend was similar in Q2 2022, where the cash conversion cycle stood at 6.99 days.

Comparing these figures, it is observed that Republic Services, Inc. has made some progress in managing its cash conversion cycle over the quarters. However, the company should aim for more consistency and strive to maintain efficient working capital management to enhance its financial performance and liquidity position.