Hub Group Inc (HUBG)

Short-term

Turnover ratios

The activity ratios of Hub Group Inc indicate the efficiency with which the company is managing its assets and liabilities.

1. Inventory Turnover: This ratio measures how quickly inventory is sold. The inventory turnover for Hub Group Inc has decreased from 2,537.29 in 2020 to 1,822.88 in 2021 and significantly dropped to 286.79 in 2022. The decreasing trend suggests a slower rate of inventory turnover, which may result in excess inventory or challenges in selling goods.

2. Receivables Turnover: This ratio shows how many times receivables are collected during a period. Hub Group Inc's receivables turnover has been relatively stable, with slight fluctuations from 6.81 in 2020 to 7.12 in 2024. A higher turnover indicates more efficient collection of receivables, contributing positively to cash flow.

3. Payables Turnover: This ratio reflects how quickly the company pays its suppliers. Hub Group Inc's payables turnover has varied over the years, showing a decrease from 11.88 in 2020 to 2.97 in 2024. A lower turnover may indicate delayed payments to suppliers, impacting relationships or potentially leading to penalties.

4. Working Capital Turnover: This ratio evaluates the efficiency of utilizing working capital to generate sales. Hub Group Inc's working capital turnover has fluctuated, demonstrating a decrease from 24.25 in 2020 to 14.68 in 2022 before slightly rising to 20.91 in 2024. A higher turnover indicates effective management of working capital to support revenue generation.

In summary, the analysis of Hub Group Inc's activity ratios highlights areas of strength, such as stable receivables turnover, and areas of concern, such as declining inventory turnover and payables turnover. Continuous monitoring and improvement in these ratios are essential for maximizing operational efficiency and financial performance.

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Average number of days

Hub Group Inc's activity ratios provide insight into how efficiently the company manages its inventory, collects its receivables, and pays its payables.

1. Days of Inventory on Hand (DOH):
- Hub Group's DOH has shown a fluctuating trend over the years, increasing from 0.14 days in 2020 to 1.27 days in 2022. However, there is missing data for 2023 and 2024. A lower DOH indicates that the company is efficiently managing its inventory and quickly turning it into sales.

2. Days of Sales Outstanding (DSO):
- The DSO for Hub Group has fluctuated as well, ranging from 46.43 days in 2022 to 58.86 days in 2021. The company has been fairly consistent in collecting payments from its customers. A lower DSO is desirable as it indicates faster collection of accounts receivable.

3. Number of Days of Payables:
- The number of days of payables has varied significantly, with the company taking 30.72 days to pay its suppliers in 2020, increasing to 158.50 days in 2023 before decreasing to 122.74 days in 2024. A higher number of days of payables suggest that the company is taking longer to settle its payables which may have cash flow implications.

Overall, Hub Group's activity ratios suggest that the company has been managing its inventory efficiently and collecting receivables in a timely manner, but its payables management has shown significant fluctuations over the years, impacting its working capital management. Monitoring and maintaining a balance between these activity ratios is essential for the company's operational efficiency and financial health.

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Long-term

The long-term activity ratios for Hub Group Inc, as indicated by the fixed asset turnover and total asset turnover ratios, provide insight into how efficiently the company utilizes its assets to generate sales.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures the company's ability to generate sales from its investment in fixed assets. A higher ratio indicates that the company is using its fixed assets more efficiently to generate revenue.
- Hub Group Inc's fixed asset turnover ratio has shown an increasing trend over the years, from 5.19 in 2020 to 5.34 in 2024. This suggests that the company is becoming more efficient in utilizing its fixed assets to generate revenue.
- The peak in 2022 with a fixed asset turnover of 6.84 indicates that the company efficiently generated sales relative to its investment in fixed assets in that year. However, there was a slight decrease in the following years.

2. Total Asset Turnover:
- The total asset turnover ratio measures how effectively the company generates revenue from all its assets, including both fixed and current assets. A higher ratio implies that the company is generating more revenue per dollar of assets.
- Hub Group Inc's total asset turnover ratio has fluctuated over the years, with a general declining trend from 1.66 in 2020 to 1.38 in 2024. This indicates a decreasing efficiency in generating sales from its total assets.
- The decrease in the total asset turnover ratio may suggest that the company is either experiencing challenges in utilizing its total assets efficiently to drive sales growth or has seen an increase in asset base without a proportional increase in sales.

In summary, while the fixed asset turnover ratio of Hub Group Inc has shown improvement, reflecting efficiency in generating revenue from fixed assets, the declining trend in the total asset turnover ratio suggests potential concerns in generating sales from the overall asset base. Further analysis into the underlying factors affecting asset utilization and revenue generation would be beneficial to understand the company's long-term operational performance.