Knight Transportation Inc (KNX)

Short-term

Turnover ratios

Knight-Swift Transportation Holdings Inc's activity ratios provide insights into how efficiently the company manages its operations and resources.

1. Receivables turnover:
- The receivables turnover ratio indicates how many times the company collects its accounts receivable during a period. Knight-Swift's receivables turnover has shown fluctuations over the quarters, ranging from 6.74 to 9.36. A higher turnover signifies that the company is collecting receivables more frequently, which is generally positive as it indicates efficient management of credit and collection policies.

2. Payables turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers. Knight-Swift's payables turnover was stagnant at 0.00 in all quarters of 2023, suggesting that the company may not have been actively managing its accounts payable during this period. It is important to note that a very low or zero payables turnover ratio could indicate potential liquidity issues or strained supplier relationships.

3. Working capital turnover:
- The working capital turnover ratio indicates the efficiency with which the company utilizes its working capital to generate sales. Knight-Swift's working capital turnover has varied significantly, from 7.27 to 225.76, indicating varying levels of efficiency in utilizing its working capital to generate revenue. A higher ratio implies better utilization of working capital, while a lower ratio may signal inefficiencies in managing working capital.

Overall, fluctuations in these activity ratios suggest changes in Knight-Swift's operational efficiency and management of resources. Further analysis and comparison with industry benchmarks are recommended to gain a deeper understanding of the company's performance in this area.

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Average number of days

Knight-Swift Transportation Holdings Inc's activity ratios, specifically the days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables, provide insight into the efficiency of the company's operations and management of working capital.

For Days of Sales Outstanding (DSO), the trend indicates that the company has been able to improve its collection period over the quarters, with a decrease from 44.28 days in Q4 2022 to 48.78 days in Q4 2023. This suggests that Knight-Swift Transportation Holdings Inc has been able to collect its accounts receivable faster over time, which can be viewed as a positive sign of efficient credit and collection practices.

In contrast, the Days of Inventory on Hand (DOH) data is not provided for any of the quarters shown. This lack of information makes it challenging to evaluate the company's management of inventory levels and the efficiency of its inventory turnover. Additional details on inventory management would be needed to provide a more comprehensive analysis of this aspect of the company's operations.

The Number of Days of Payables data is missing for the first four quarters of 2023, but in Q3 and Q2 2022, there were significant jumps in the number of days of payables from 74.83 days in Q3 2022 to 145.23 days in Q2 2022. This indicates that Knight-Swift Transportation Holdings Inc was taking longer to pay its suppliers during that period, which could potentially strain supplier relationships and cash flow management.

Overall, while the improvements in the DSO ratio suggest enhanced efficiency in collecting accounts receivable, the lack of DOH data and the notable increase in the number of days of payables in previous quarters signal aspects of Knight-Swift Transportation Holdings Inc's activities that may require further examination and possibly adjustments to optimize working capital management.

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Long-term

The fixed asset turnover ratio for Knight-Swift Transportation Holdings Inc has shown a declining trend over the past eight quarters, from 2.04 in Q3 2022 to 1.55 in Q4 2023. This indicates that the company is generating less revenue relative to its fixed assets, such as property, plant, and equipment. A lower fixed asset turnover ratio could suggest inefficiencies in asset utilization or a decrease in sales generated from these fixed assets.

On the other hand, the total asset turnover ratio has also experienced a downward trajectory, falling from 0.70 in Q3 2022 to 0.55 in Q4 2023. This indicates a reduction in the company's ability to generate sales revenue relative to its total assets, including both fixed and current assets. A declining total asset turnover ratio may point to challenges in efficiently utilizing the company's overall asset base to generate sales.

In comparison, the fixed asset turnover ratio is consistently higher than the total asset turnover ratio, indicating that Knight-Swift Transportation Holdings Inc is relatively more efficient in utilizing its fixed assets to generate revenue compared to its total assets. However, the decreasing trend in both ratios suggests that the company may need to assess and improve its asset utilization strategies to enhance overall operational efficiency and profitability in the long term.