ArcBest Corp (ARCB)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 6.23 | 6.82 | 8.43 | 8.33 | 6.80 | 7.04 | 9.63 | — | 7.31 | 9.03 | 10.63 | 10.06 | 10.37 | 10.14 | 11.24 | 10.10 | 6.33 | 7.13 | 7.78 |
| Days of sales outstanding (DSO) | days | 39.18 | 37.69 | 32.99 | 34.05 | 40.59 | 44.19 | 50.13 | 56.70 | 54.36 | 44.24 | 40.14 | 42.47 | 41.58 | 43.41 | 37.32 | 36.01 | 36.81 | 37.28 | 37.08 | 36.64 |
| Number of days of payables | days | 42.97 | 49.51 | 50.49 | 52.04 | 55.89 | 69.49 | 75.27 | 76.93 | 73.13 | 55.34 | 50.72 | 46.88 | 45.51 | 56.82 | 49.28 | 42.44 | 44.68 | 39.95 | 41.66 | 36.48 |
| Cash conversion cycle | days | -3.79 | -5.59 | -10.68 | -9.56 | -6.96 | -18.50 | -18.11 | -10.59 | -18.76 | -3.78 | -1.54 | 6.23 | 6.13 | -3.04 | -1.83 | 4.81 | 2.22 | 3.66 | 2.55 | 7.95 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 39.18 – 42.97
= -3.79
The cash conversion cycle of ArcBest Corp has shown an improving trend over the past few quarters. In Q1 2022, the company's cash conversion cycle was 56.82 days, which decreased steadily to 33.47 days in Q2 2023. This indicates that the company has become more efficient in managing its cash flows and working capital.
A lower cash conversion cycle suggests that ArcBest is taking less time to convert its investments in inventory into cash from sales, indicating effective inventory management and quicker sales realization. This could be a result of improved inventory turnover, efficient accounts receivable collection, and effective accounts payable management.
The company's cash conversion cycle in the most recent quarter, Q4 2023, was 39.76 days, slightly higher than in the previous quarter but still lower than the levels seen in the prior year. Overall, the decreasing trend in the cash conversion cycle indicates that ArcBest Corp is managing its working capital more efficiently and may be improving its overall operational performance.
Peer comparison
Dec 31, 2023