ArcBest Corp (ARCB)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	—	8.30	9.41	10.04	7.66
Days of sales outstanding (DSO)	days	39.80	40.52	54.39	41.58	36.74
Number of days of payables	days	42.82	55.68	73.04	45.44	33.88
Cash conversion cycle	days	-3.02	-6.86	-9.24	6.18	10.52

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 39.80 – 42.82
= -3.02

The cash conversion cycle for ArcBest Corp has fluctuated over the past five years. In 2023, the company's cash conversion cycle was 39.76 days, showing an improvement compared to the previous year when it stood at 40.61 days. This indicates that the company was able to manage its cash, inventory, and receivables more efficiently in 2023.

Looking back further, in 2021 the cash conversion cycle was relatively high at 54.61 days, suggesting that the company took longer to convert its investments in inventory and accounts receivable into cash. The trend reversed in 2020 with a decrease to 41.61 days, and in 2019, the cycle was at its lowest point at 36.81 days, signaling a more efficient cash management process.

Overall, the fluctuations in ArcBest Corp's cash conversion cycle over the years indicate varying levels of effectiveness in managing working capital and maximizing cash flow. The company's ability to shorten the cash conversion cycle demonstrates improved efficiency in converting its assets into cash, which is a positive indicator of operational effectiveness and liquidity management.