Trinity Industries Inc (TRN)

Trinity Industries Inc's current ratio has shown some fluctuation over the past five years, ranging from a high of 2.54 in December 31, 2020, to a low of 1.88 in December 31, 2021, and improving to 2.41 by December 31, 2024. This ratio indicates the company's ability to cover its short-term obligations with its current assets, with a ratio above 1 suggesting a healthy liquidity position.

In contrast, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has been more volatile, dropping to 0.18 in December 31, 2022, before significantly improving to 0.91 by December 31, 2024. A quick ratio below 1 may suggest potential difficulties in meeting short-term obligations without relying on inventory.

The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has followed a similar trend to the quick ratio, indicating low levels of cash on hand relative to current liabilities in 2022 and 2023, but improving significantly to 0.91 by December 31, 2024. This may indicate a stronger ability to meet short-term obligations with cash reserves alone.

Overall, Trinity Industries Inc's liquidity ratios have shown some variability over the years, with the current and cash ratios generally improving towards the end of the period, while the quick ratio experienced significant fluctuations. Monitoring these ratios can provide insight into the company's ability to meet its short-term financial commitments and manage liquidity effectively.

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Additional liquidity measure

Based on the data provided, Trinity Industries Inc's cash conversion cycle has fluctuated over the past five years.

In December 2020, the cash conversion cycle was 77.72 days, indicating that on average, it took the company 77.72 days to convert raw materials into cash through the sale of finished goods.

There was a significant increase in the cash conversion cycle to 136.04 days by December 2021, suggesting that Trinity Industries Inc took longer to convert its resources into cash during that period.

This trend continued with a further increase to 142.73 days by December 2022, indicating potential inefficiencies in managing working capital and liquidity.

By December 2023, the cash conversion cycle decreased to 101.69 days, showing some improvement in the company's cash conversion efficiency.

The most recent data point, December 2024, shows a notable decrease in the cash conversion cycle to 72.09 days, indicating that Trinity Industries Inc was able to convert its resources into cash more quickly during that period.

In conclusion, Trinity Industries Inc's cash conversion cycle has exhibited fluctuations over the past five years, with periods of inefficiency followed by improvements. Monitoring and managing the cash conversion cycle is crucial for the company to optimize its working capital and cash flow efficiency.