Saia Inc (SAIA)

Saia Inc's liquidity ratios have shown fluctuations over the past few years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has generally improved from 1.23 in March 2020 to 2.01 in December 2023, before decreasing to 1.57 in December 2024. This indicates that the company had more than enough current assets to cover its current liabilities, but the ratio has recently declined.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also showed an upward trend from 1.06 in March 2020 to 1.89 in December 2023, before dropping to 1.39 in December 2024. This suggests that the company has a strong ability to meet its immediate short-term obligations without relying on inventory.

The cash ratio, which specifically looks at a company's ability to cover its current liabilities with its cash and cash equivalents, has shown a similar trend of improvement over the years, increasing from 0.19 in March 2020 to 0.92 in December 2023, then decreasing to 0.07 in December 2024. This indicates a significant increase in the company's ability to settle its short-term debts using its cash reserves, although there was a sharp decrease in the most recent period.

Overall, while Saia Inc has demonstrated a generally positive liquidity position over the years, there have been recent declines in its current, quick, and cash ratios, which may warrant further analysis and monitoring of the company's liquidity management in the upcoming periods.

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Additional liquidity measure

Saia Inc's cash conversion cycle, a key metric that reflects the efficiency of the company's cash management, has shown some fluctuations over the past few quarters. The cash conversion cycle is a measure of the time it takes for a company to convert its investment in inventory and other inputs into cash flows from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle of Saia Inc ranged from a low of 4.80 days to a high of 26.81 days. This indicates variability in the efficiency of their working capital management during this period.

It is worth noting that a lower cash conversion cycle is generally considered better as it implies that the company is able to quickly sell its inventory, collect receivables, and convert them into cash. Conversely, a higher cash conversion cycle may suggest inefficiencies in inventory management, credit policies, or delays in the collection of accounts receivable.

Saia Inc experienced some periods of improvement in its cash conversion cycle, such as in March 31, 2021, and December 31, 2023, where the days were relatively low at 8.25 and 4.80 days, respectively. Conversely, the company faced challenges in managing its cash conversion cycle, particularly in September 30, 2023, and December 31, 2024, where the days were significantly higher at 23.81 and 26.81 days, respectively.

Overall, Saia Inc should continue to monitor and evaluate its cash conversion cycle to identify areas for improvement in working capital management, aiming for a more consistent and efficient conversion of investments into cash flows.