JB Hunt Transport Services Inc (JBHT)

Short-term

Turnover ratios

The activity ratios of J.B. Hunt Transport Services, Inc. indicate the efficiency of the company in managing its assets and liabilities to generate sales and cash flow.

1. Inventory turnover:
- The inventory turnover has been declining over the past three years, with a significant decrease in 2021. This may suggest that the company is holding onto inventory for longer periods, possibly due to issues such as overstocking or slow-moving inventory.

2. Receivables turnover:
- The receivables turnover has been relatively stable over the past five years, indicating that the company is efficient in collecting receivables from customers. A consistent receivables turnover ratio implies effective credit management and timely collection processes.

3. Payables turnover:
- The payables turnover has shown inconsistency, with a decrease in 2021. A low payables turnover ratio may indicate that the company is taking longer to pay its suppliers, which could lead to strained relationships with vendors.

4. Working capital turnover:
- The working capital turnover has been increasing steadily over the years, indicating that the company is able to generate sales efficiently using its working capital. A higher working capital turnover ratio reflects the company's ability to generate revenue with minimal investment in working capital.

In summary, while J.B. Hunt Transport Services, Inc. demonstrates efficiency in managing receivables and working capital turnover, there are areas of concern such as declining inventory turnover and inconsistent payables turnover. The company may benefit from evaluating its inventory management policies and improving its payment practices to optimize its working capital efficiency.

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Average number of days

J.B. Hunt Transport Services, Inc.'s activity ratios show varying trends over the years, reflecting changes in the efficiency of managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
The Days of Inventory on Hand (DOH) measures how many days, on average, the company holds its inventory before selling it. The trend for J.B. Hunt shows an increase in DOH from 15.91 days in 2022 to 20.49 days in 2023. This indicates that the company took longer to sell its inventory in 2023 compared to the previous year, potentially tying up more capital in inventory.

2. Days of Sales Outstanding (DSO):
The Days of Sales Outstanding (DSO) metric reflects how long it takes for the company to collect payment after making a sale. J.B. Hunt's DSO increased to 48.08 days in 2023 from 45.80 days in 2022. This implies that the company took slightly longer to collect payments from its customers in 2023, which may have impacted its cash flow.

3. Number of Days of Payables:
The Number of Days of Payables represents the average number of days it takes for the company to pay its suppliers. J.B. Hunt's days of payables increased significantly from 312.92 days in 2022 to 358.14 days in 2023. A higher number of days of payables can be seen as a positive sign for the company as it indicates an ability to delay cash outflows, potentially improving liquidity.

In summary, J.B. Hunt Transport Services, Inc. experienced an increase in Days of Inventory on Hand and Days of Sales Outstanding in 2023, which may signal potential issues with inventory management and collections. However, the increase in the Number of Days of Payables could have a positive impact on the company's cash flow and liquidity position. Monitoring these activity ratios can provide insights into the company's operational efficiency and working capital management.

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Long-term

The long-term activity ratios of J.B. Hunt Transport Services, Inc. show how efficiently the company utilizes its assets to generate sales over the years. The fixed asset turnover has been relatively stable, fluctuating between 2.22 and 2.99 from 2019 to 2023, with a peak in 2022. This indicates that the company is generating revenue efficiently from its fixed assets such as property, plant, and equipment.

Meanwhile, the total asset turnover has also shown a consistent trend, varying between 1.50 and 1.90 from 2019 to 2023. This ratio reveals how effectively the company generates sales from all its assets, including fixed and current assets. The gradual increase in total asset turnover from 2019 to 2023 suggests an improvement in the overall asset utilization efficiency of the company.

Overall, the stable and relatively high fixed asset turnover, along with a gradually increasing total asset turnover, indicates that J.B. Hunt Transport Services, Inc. has been effectively utilizing its assets to drive sales and maximize operational efficiency in the long term. These ratios are important indicators of the company's operational performance and efficiency in generating revenue from its asset base.