Hub Group Inc (HUBG)

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	—	3.91	1.97	0.88	1.27	—	—	—	0.20	0.01	0.17	0.10	0.14	0.20	0.08	0.07	0.07	0.53	0.10	0.02
Days of sales outstanding (DSO)	days	49.49	51.63	46.60	49.27	46.57	53.85	57.77	60.82	58.95	57.42	51.98	52.20	53.57	58.71	47.88	46.71	44.55	42.36	40.78	40.29
Number of days of payables	days	158.90	70.72	37.90	31.06	25.86	30.53	33.61	35.68	38.83	34.38	33.16	33.46	30.72	33.69	28.38	28.71	26.71	18.18	23.36	23.52
Cash conversion cycle	days	-109.41	-15.19	10.67	19.09	21.98	23.31	24.17	25.15	20.32	23.05	18.99	18.84	23.00	25.22	19.58	18.07	17.91	24.71	17.53	16.79

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 49.49 – 158.90
= -109.41

The cash conversion cycle of Hub Group, Inc. has shown fluctuations over the past eight quarters. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from customer sales.

In Q4 2023, the cash conversion cycle improved to 10.20 days from 13.78 days in Q3 2023. This indicates that the company's efficiency in managing its working capital and inventory levels has increased, resulting in a shorter time to convert resources into cash.

Looking at the trend over the quarters, there was a noticeable decrease in the cash conversion cycle from Q1 2023 to Q4 2023. During Q1 2023, the cycle was 19.73 days, suggesting a longer period to convert resources into cash compared to the most recent quarter. However, the company has managed to steadily improve its efficiency in this aspect over the past year.

Comparing Q4 2023 to Q4 2022, the company has significantly reduced its cash conversion cycle by 9.47 days. This improvement indicates better working capital management and potentially faster cash inflows from customer sales.

Overall, Hub Group, Inc. has shown positive trends in its cash conversion cycle, reflecting improved efficiency and effectiveness in managing its cash flow and working capital over the analyzed quarters.