Knight Transportation Inc (KNX)

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	—	34.14	66.26	27.49	26.14	22.53	18.99	23.68	21.27	20.88	17.95	19.43	20.30	20.50	19.53	19.28	19.72	22.86	21.37	20.51
Days of sales outstanding (DSO)	days	48.78	54.14	38.98	41.88	44.68	46.67	51.25	51.96	55.63	58.66	49.34	44.67	45.64	45.16	42.32	41.40	40.67	40.65	41.38	38.68
Number of days of payables	days	23.95	21.70	17.23	16.29	16.90	19.71	19.94	25.05	24.94	21.54	19.95	17.13	13.69	19.75	17.70	22.22	12.69	18.30	20.36	19.21
Cash conversion cycle	days	24.83	66.59	88.01	53.08	53.93	49.49	50.30	50.60	51.96	58.00	47.35	46.97	52.24	45.91	44.14	38.45	47.70	45.20	42.38	39.97

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 48.78 – 23.95
= 24.83

The cash conversion cycle of Knight-Swift Transportation Holdings Inc has exhibited fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle increased to 48.78 days from 54.14 days in Q3 2023, indicating that it took slightly longer for the company to convert its inventory and receivables into cash during this period.

Compared to the previous quarter, the increase in the cash conversion cycle may suggest that Knight-Swift Transportation Holdings Inc experienced challenges in efficiently managing its working capital and converting its assets into cash within the quarter. This could be a result of various factors such as changes in demand, inventory management inefficiencies, or payment delays from customers.

It is important for the company to closely monitor its cash conversion cycle as it provides insights into the efficiency of its working capital management. By keeping the cash conversion cycle at an optimal level, Knight-Swift Transportation Holdings Inc can ensure a healthy cash flow and improve its overall financial performance.