Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Cash Flow Statement
- Analysis of Solvency Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Liquidity Ratios (Summary)
Old Dominion Freight Line Inc., liquidity ratios
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Current Ratio
- The current ratio showed an increasing trend from 1.98 in 2018 to a peak of 3.33 in 2020, indicating an improvement in short-term liquidity and the company’s ability to cover its current liabilities with current assets. However, following 2020, it declined to 2.98 in 2021 and further decreased significantly to 1.76 in 2022, suggesting a reduction in liquidity and a potential tightening of working capital over the most recent year.
- Quick Ratio
- The quick ratio mirrored the pattern observed in the current ratio, rising steadily from 1.85 in 2018 to 3.18 in 2020. This increase highlights a stronger position in terms of liquid assets excluding inventories. Subsequently, the quick ratio declined to 2.79 in 2021 and dropped substantially to 1.56 in 2022, indicating a decrease in highly liquid assets relative to current liabilities in the latest period.
- Cash Ratio
- The cash ratio exhibited the most pronounced volatility, nearly doubling from 0.53 in 2018 to 1.96 in 2020. This significant increase underscores an accumulation of cash or cash equivalents relative to current liabilities during this time frame. The ratio then decreased to 1.54 in 2021 and sharply fell to 0.44 in 2022, reflecting a considerable decline in the company’s cash reserves or cash-equivalent assets relative to its short-term obligations in the most recent year.
- Overall Liquidity Trends
- Across all three liquidity ratios, a clear pattern emerged where liquidity strengthened markedly up to 2020, with the company becoming more capable of meeting short-term liabilities with current, quick, and cash assets. From 2021 onward, this trend reversed, with liquidity ratios declining substantially by 2022. This downward shift may indicate changes in the company’s asset composition, increased current liabilities, or a strategic deployment of liquidity resources. The decline, particularly the sharp drop in the cash ratio, suggests a more constrained cash position at year-end 2022 compared to prior years.
Current Ratio
Old Dominion Freight Line Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| Current Ratio, Sector | ||||||
| Transportation | ||||||
| Current Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Over the examined five-year period, current assets exhibited an overall upward trajectory from 706,229 thousand to a peak of 1,383,787 thousand by the end of 2021. This represents a considerable increase, indicating growth in assets that can be converted into cash within a year. However, in the final year, there was a notable decline to 933,740 thousand, suggesting a reduction in short-term asset holdings.
- Current Liabilities
- Current liabilities steadily increased year over year, starting at 356,732 thousand and rising consistently to reach 529,793 thousand by December 2022. This continuous growth indicates increasing obligations payable within one year, which could reflect either expanding operations or growing short-term financial pressures.
- Current Ratio
- The current ratio, a key liquidity measure, rose from 1.98 in 2018 to a high of 3.33 in 2020, evidencing a strengthening liquidity position during this period. Subsequently, it declined to 2.98 in 2021 and further down to 1.76 by 2022. Despite the final decrease, the ratio remained above 1, indicating that current assets still exceeded current liabilities, though the margin of safety has narrowed compared to previous years.
- Summary
- The data points to an expansion in current assets and liabilities over the five years, with a significant peak in asset levels around 2021, followed by a correction in the last year. The rising current liabilities may reflect increased operational scale or higher short-term financing needs. The current ratio's peak and subsequent decline suggest that while liquidity was robust in prior years, it has moderated more recently, highlighting a potential need for closer liquidity management to maintain a comfortable buffer over current obligations.
Quick Ratio
Old Dominion Freight Line Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | ||||||
| Short-term investments | ||||||
| Customer receivables, less allowances | ||||||
| Other receivables | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| Quick Ratio, Sector | ||||||
| Transportation | ||||||
| Quick Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets displayed a general upward trend from 2018 to 2021, with values increasing from $658.5 million to approximately $1.3 billion. However, in 2022, there was a significant decline to $828 million, indicating a reduction in highly liquid assets available in the most recent period.
- Current Liabilities
- Current liabilities steadily increased each year, rising from $356.7 million in 2018 to $529.8 million in 2022. The increase was particularly notable between 2020 and 2022, suggesting growing short-term obligations that the company must meet within a year.
- Quick Ratio
- The quick ratio improved from 1.85 in 2018 to a peak of 3.18 in 2020, reflecting a strengthening ability to cover current liabilities with liquid assets. Following that peak, the ratio declined to 2.79 in 2021 and further dropped to 1.56 in 2022, indicating a diminished short-term liquidity position relative to the earlier peak.
- Summary
- Overall, the data reveals a rise in liquid assets and an improved liquidity position until 2020, followed by a deterioration beginning in 2021 and accelerating in 2022. Concurrently, current liabilities increased steadily, which, coupled with the decline in quick assets, exerted downward pressure on the quick ratio. These trends suggest increasing short-term financial obligations alongside a reduction in the most readily available assets, leading to heightened liquidity risk in the latest period analyzed.
Cash Ratio
Old Dominion Freight Line Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | ||||||
| Short-term investments | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| Cash Ratio, Sector | ||||||
| Transportation | ||||||
| Cash Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- There was a substantial increase in total cash assets from 2018 to 2020, growing from approximately $190 million to over $731 million. This peak in 2020 was followed by a slight decline in 2021 to around $717 million, and then a significant drop in 2022 to approximately $236 million.
- Current Liabilities
- Current liabilities displayed a gradual upward trend over the five-year period, increasing consistently each year from approximately $357 million in 2018 to nearly $530 million in 2022. The most notable increase occurred between 2021 and 2022.
- Cash Ratio
- The cash ratio, reflecting liquidity, showed a pronounced rise from 0.53 in 2018 to a peak of 1.96 in 2020, implying strong liquidity relative to current liabilities during that year. However, this ratio declined to 1.54 in 2021 and then sharply decreased to 0.44 in 2022, indicating a reduction in immediate liquidity and potential increased reliance on other assets or financing sources to meet short-term obligations.