RXO Inc. (RXO)

Based on the provided liquidity ratios for RXO Inc., we can observe the following trends:

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term obligations with its current assets.
- RXO Inc.'s current ratio declined from 1.38 in June 2023 to 1.17 in December 2023.
- While a current ratio above 1 indicates that the company has more current assets than current liabilities, a decrease in this ratio over time may suggest potential challenges in meeting short-term obligations.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets.
- RXO Inc.'s quick ratio showed a similar declining trend from 1.35 in June 2023 to 1.10 in December 2023.
- This decreasing trend indicates that the company's ability to meet its short-term liabilities without relying on inventory decreased over the period.

3. Cash Ratio:
- The cash ratio assesses a company's ability to cover its short-term obligations with its available cash and cash equivalents.
- RXO Inc.'s cash ratio fluctuated between 0.01 and 0.21 during the period.
- While a cash ratio of 0.01 in December 2023 indicates that the company has minimal liquid reserves, the increase to 0.21 in September 2023 suggests an improvement in short-term liquidity.

Overall, the liquidity ratios of RXO Inc. showed mixed results over the period, with a general decreasing trend in both the current and quick ratios. The fluctuation in the cash ratio indicates variability in the company's ability to cover short-term obligations with cash on hand. It may be advisable for RXO Inc. to closely monitor its liquidity position and take necessary actions to ensure adequate liquidity to meet its obligations in a timely manner.

---

Additional liquidity measure

The cash conversion cycle of RXO Inc. has ranged from 22.87 days to 26.93 days over the past three quarters. This cycle measures the number of days it takes for the company to convert its investments in inventory and other resources into cash from sales to customers. A shorter cash conversion cycle indicates that the company is efficiently managing its working capital and turning its resources into cash quickly.

The trend of RXO Inc.'s cash conversion cycle decreasing from 26.93 days in December 2023 to 22.87 days in June 2023 suggests that the company has improved its ability to manage its inventory, collect receivables, and pay its suppliers more efficiently during this period. This signifies a positive trend in the company's working capital management, which can lead to improved liquidity and profitability over time.

Overall, a decreasing cash conversion cycle can suggest operational efficiency and effective management of working capital, which are favorable indicators for the financial health of RXO Inc.