Union Pacific Corp. (NYSE:UNP)

The financial ratios for the company over the analyzed quarters demonstrate varying trends across liquidity measurements. The current ratio, which reflects the company's ability to cover its short-term liabilities with its short-term assets, exhibits fluctuations within a relatively narrow range. Initially, the current ratio declined from 0.76 to 0.62 over the first year, indicating a decreasing short-term liquidity. However, this trend reversed in the subsequent quarters, reaching a peak of 1.05 before decreasing again to the 0.65–0.75 range in the later periods. This oscillation suggests periodic adjustments in working capital management or shifts in short-term obligations and assets.

The quick ratio, which excludes inventory from current assets and thus presents a more stringent liquidity measure, follows a similar pattern but maintains lower values throughout. Starting at 0.57, it decreased to a low of 0.47 before improving to as high as 0.76, then falling back to the vicinity of 0.46–0.56 by the latest periods. This indicates changes in more liquid current assets, such as receivables and cash equivalents, possibly influenced by operational cash flow or credit terms.

The cash ratio, the most conservative liquidity measure focusing solely on cash and cash equivalents relative to current liabilities, remains consistently lower than both the current and quick ratios. It shows minor fluctuations from a starting point of 0.24 down to lows around 0.13–0.16 before rising again to 0.27 and finally settling near 0.15. This stability at a lower level suggests that the company maintains a limited amount of immediate cash resources in relation to its short-term obligations, relying possibly on other liquid assets or credit facilities to meet short-term liabilities.

Overall, the ratios indicate that while the company's liquidity varies across quarters, it consistently operates with current ratios below or near 1, implying cautious management of short-term liquidity without substantial excess current assets. The peak in liquidity ratios around late 2023 to mid-2024 could reflect temporary accumulation of assets or slower liability growth, but the subsequent decline points to a return to typical liquidity levels. The relatively low and stable cash ratio emphasizes a limited buffer of cash on hand, with liquidity maintenance relying more on receivables and inventory management.

Current Ratio

Shows moderate liquidity with fluctuations; decreased during early periods, peaked in mid-2024, then decreased again.

Quick Ratio

Tracks the current ratio trend but with lower values, indicating less immediate liquid assets excluding inventory.

Cash Ratio

Consistently low, suggesting minimal cash reserves relative to short-term liabilities; minor ups and downs over time.

Current Assets

The current assets exhibit a generally fluctuating pattern over the periods analyzed. Starting at 3,719 million USD in the first quarter of 2021, there is a gradual increase reaching a peak around mid-2024 at 4,498 million USD. However, the figures also show intermittent declines, notably towards the end of 2024 and into 2025, where current assets decrease again to approximately 3,904 million USD by the first quarter of 2025. This indicates some volatility, but the overall trend from 2021 through mid-2024 was upward before a subsequent decline.

Current Liabilities

Current liabilities fluctuate more prominently with substantial variation across quarters. The values start near 4,871 million USD in early 2021 and show significant swings, for example decreasing at mid-2021, then increasing sharply by late 2021 and early 2022. The pattern continues with peaks such as 6,452 million USD in the third quarter of 2025 and troughs around 4,287 million USD in mid-2024. This signifies a generally high level of variability in current liabilities, with notable increases during the middle and later periods within the dataset.

Current Ratio

The current ratio generally stays below 1.0 throughout the periods, indicating that current liabilities consistently exceed current assets. Initially, the ratio begins below 1 at 0.76 in early 2021 and fluctuates between approximately 0.62 and 0.93, showing some improvement around early to mid-2024 where it briefly exceeds 0.9 and even surpasses 1.0 at 1.05 in June 2024. Following this peak, the current ratio declines again below 1.0 through 2025, settling near 0.75 by the first quarter of 2025. The temporary improvement in liquidity mid-2024 suggests a period of enhanced short-term financial strength, but this was not sustained in subsequent quarters.

Analysis of Total Quick Assets

The total quick assets demonstrate fluctuations over the periods analyzed. From March 2021 through the end of 2021, the values exhibit minor variability, ranging between approximately 2682 and 2873 million US dollars. The first half of 2022 shows an increase, peaking at 3319 million US dollars in September, before a decline towards the end of the year. In 2023 and 2024, there is a pattern of oscillation with values generally staying above 2600 million, except for occasional dips such as June 2023. By early 2025, quick assets decline from 3376 million to 2729 million, marking a noticeable downward movement from the previous peak.

Analysis of Current Liabilities

Current liabilities reflect overall growth with some swings over the observed timeframe. The values start at 4871 million US dollars in March 2021, trend upwards through the quarters with peaks near or exceeding 6200 million, particularly around March 2023 and mid-2025. The pattern suggests rising short-term obligations with certain temporary reductions, but a general increase is evident, especially when comparing early 2021 figures with those in 2025.

Analysis of Quick Ratio

The quick ratio, which measures liquidity by comparing quick assets to current liabilities, exhibits variability aligned with the trends in quick assets and liabilities. Initially, the ratio hovers around 0.5 to 0.6 in 2021, dips to a low of 0.47 at the end of 2021 and mid-2022, then improves to higher levels in 2023 and mid-2024 reaching up to 0.76. Subsequently, the ratio declines again through late 2024 and early 2025, settling around 0.52. These fluctuations reflect changes in liquidity and the company's ability to cover current liabilities without relying on inventory.

Overall Insights

The company’s liquidity position, as indicated by the quick ratio, shows periods of improvement and weakening, generally oscillating between 0.46 and 0.76. The increases in quick assets during mid-2022 and mid-2024 suggest efforts to strengthen liquid resources; however, concurrent rises in current liabilities moderate the overall liquidity gains. The decline in quick ratio in early 2025 suggests increased pressure on short-term financial stability. Continued monitoring of the balance between quick assets and current liabilities is advisable to maintain adequate liquidity levels.

The financial data reveals notable fluctuations in liquidity and short-term obligations over the reported periods.

Total Cash Assets

Total cash assets demonstrate variability, ranging from a low of approximately US$ 750 million to a peak near US$ 1,411 million. There is no consistent upward or downward trend, but rather cyclical movements with several peaks around December and March of various years. Notably, the highest recorded cash position occurs in the first quarter of 2025, while several decreases occur mid-year periods, indicating potential seasonality or periodic changes in cash management strategies.

Current Liabilities

Current liabilities exhibit a generally increasing trend with some fluctuations. Beginning near US$ 4,357 million in mid-2021, liabilities increase with intermittent dips, reaching peaks above US$ 6,400 million in mid-2025. This upward trajectory suggests growth in short-term obligations over time, though occasional decreases imply short periods of liability reduction or refinancing activities.

Cash Ratio

The cash ratio, which measures liquidity by comparing total cash assets to current liabilities, remains relatively low throughout the periods, consistently below 0.3. It fluctuates between 0.13 and 0.27, indicating limited coverage of short-term liabilities by cash alone. Periods where the ratio improves generally coincide with peaks in cash assets or reductions in current liabilities. The cash ratio’s restrained range implies a cautious liquidity position, possibly reflecting reliance on other forms of liquid assets or financial strategies beyond cash holdings.

Overall, the data depicts a company managing fluctuating cash balances alongside rising current liabilities, maintaining a modest cash coverage ratio. The patterns suggest careful liquidity management amidst changing obligations, with potential seasonality influencing cash levels and short-term liability cycles.