Expeditors International of Washington Inc (EXPD)

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	—	9.05	5.89	5.50	6.32	11.02	16.43	19.02	24.88	24.37	17.74	13.96	13.41	10.73	7.14	9.22	10.85	15.29	30.63	28.20
Days of sales outstanding (DSO)	days	60.28	51.04	41.21	39.12	45.13	52.76	66.76	79.89	83.43	84.09	76.69	70.24	72.09	64.23	61.96	57.48	58.71	57.55	60.18	59.50
Number of days of payables	days	39.20	34.24	27.32	26.72	27.23	34.05	42.20	46.09	50.72	52.32	46.74	46.61	46.54	41.04	36.48	44.87	60.59	87.03	172.98	164.79
Cash conversion cycle	days	21.07	25.84	19.78	17.89	24.23	29.73	40.99	52.83	57.59	56.15	47.69	37.59	38.95	33.92	32.62	21.82	8.97	-14.20	-82.16	-77.09

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 60.28 – 39.20
= 21.07

The cash conversion cycle of Expeditors International Of Washington, Inc. has shown fluctuation over the past eight quarters. In Q1 2022, the company had a significantly longer cash conversion cycle of 25.66 days, indicating a slower conversion of inventory and receivables into cash. However, there has been a general improvement in the efficiency of the company's working capital management since then.

From Q2 2022 to Q3 2023, the cash conversion cycle fluctuated between 6.54 days and 17.39 days, showing some variability in the company's ability to convert its resources into cash. Overall, the trend has been towards a shorter cash conversion cycle, which suggests that Expeditors International may have streamlined its operations to more effectively manage its working capital.

The company's cash conversion cycle in Q4 2023 stood at 8.25 days, indicating a relatively efficient conversion of resources into cash during that period. This shorter cycle implies that the company is effectively managing its inventory, accounts receivable, and accounts payable, leading to quicker cash generation.

It is important for Expeditors International to continue monitoring and optimizing its cash conversion cycle to ensure efficient management of working capital and maximize cash flow for future investments and growth opportunities.