XPO Logistics Inc (XPO)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.06 | 1.06 | 1.00 | 0.94 | 1.00 | 1.06 | 0.99 | 1.01 | 1.08 | 1.16 | 1.11 | 1.04 | 1.05 | 1.01 | 1.02 | 1.02 | 1.04 | 1.39 | 1.51 | 1.18 |
| Quick ratio | 0.92 | 0.92 | 0.87 | 0.81 | 0.87 | 0.93 | 0.85 | 0.86 | 0.94 | 1.05 | 1.00 | 0.95 | 0.93 | 0.89 | 0.91 | 0.90 | 0.96 | 1.27 | 1.36 | 1.05 |
| Cash ratio | 0.17 | 0.24 | 0.16 | 0.14 | 0.26 | 0.23 | 0.19 | 0.20 | 0.31 | 0.22 | 0.17 | 0.29 | 0.10 | 0.10 | 0.18 | 0.15 | 0.40 | 0.56 | 0.69 | 0.33 |
The liquidity ratios of XPO Logistics Inc indicate the company's ability to meet its short-term obligations promptly. The current ratio, which measures the company's ability to repay its current liabilities with its current assets, shows a slight fluctuation over the years but generally stays above 1, indicating that XPO Logistics has sufficient current assets to cover its short-term liabilities.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibits fluctuations but tends to stay below 1. This may indicate that a significant portion of XPO Logistics' current assets is tied up in inventory, which may pose a liquidity risk in the short term.
The cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, displays variations over the years but generally remains below 1. This suggests that XPO Logistics relies more on non-cash current assets to meet its short-term obligations.
Overall, while XPO Logistics Inc's liquidity ratios show some fluctuations, the current and cash ratios staying above 1 provide a level of comfort regarding the company's ability to meet its short-term financial commitments. However, the consistently low quick ratio may warrant further investigation into the company's inventory management practices and potential liquidity risks associated with it.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 4.81 | 8.07 | 6.16 | -2.75 | -4.33 | -9.19 | 9.81 | 18.58 | 22.19 | 45.20 | 38.10 | 29.56 | 44.89 | 20.95 | 46.00 | 36.00 | 41.02 | 19.86 | 13.21 | 5.97 |
The cash conversion cycle of XPO Logistics Inc has displayed fluctuations over the past few years. It measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to September 30, 2021, the company's cash conversion cycle increased steadily, indicating a longer period for the company to generate cash from its operations. This could be due to various factors such as slower inventory turnover or delayed collections from customers.
However, from December 31, 2021, to June 30, 2024, the cash conversion cycle showed volatility with both positive and negative values. Negative values suggest that the company was able to convert its investments into cash more quickly, which can be a positive sign of efficiency in managing working capital and operations.
In conclusion, while XPO Logistics Inc experienced fluctuations in its cash conversion cycle, it is essential for the company to monitor and manage this metric effectively to ensure optimal utilization of resources and improved cash flow management.