JB Hunt Transport Services Inc (JBHT)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 2.82 | 2.65 | 2.12 | 2.39 | 2.16 |
| Days of sales outstanding (DSO) | days | 38.26 | 37.72 | 45.39 | 42.82 | 40.60 |
| Number of days of payables | days | 49.34 | 52.17 | 65.53 | 59.00 | 61.62 |
| Cash conversion cycle | days | -8.26 | -11.81 | -18.02 | -13.79 | -18.87 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 2.82 + 38.26 – 49.34
= -8.26
The cash conversion cycle of J.B. Hunt Transport Services, Inc. has shown fluctuations over the past five years, indicating varying efficiency in managing its working capital.
In 2023 and 2022, the company's cash conversion cycle was negative, which implies that it was able to convert its investment in inventory back to cash rapidly. This may indicate effective inventory management, efficient receivables collection, and/or advantageous payables terms.
In contrast, in 2021, the cash conversion cycle was significantly negative, indicating a very rapid cash cycle. While this may seem positive, an extremely low cash conversion cycle could also signal aggressive cash management that may not be sustainable over the long term.
Conversely, in 2020 and 2019, the company had positive cash conversion cycles, indicating that it took longer to convert its investment in inventory back to cash. This could be due to issues in managing inventory levels, delayed receivables collection, or extended payables terms.
Overall, the trend of the cash conversion cycle for J.B. Hunt Transport Services, Inc. suggests fluctuations in working capital efficiency over the past five years, which could be an area of focus for the company to optimize its cash flow management in the future.
Peer comparison
Dec 31, 2023