Marten Transport Ltd (MRTN)

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	5.25	4.47	4.41	3.52	3.94
Days of sales outstanding (DSO)	days	37.37	36.94	39.73	36.58	44.05
Number of days of payables	days	30.49	30.69	20.29	26.84	26.62
Cash conversion cycle	days	12.13	10.72	23.84	13.26	21.37

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 5.25 + 37.37 – 30.49
= 12.13

The cash conversion cycle of Marten Transport, Ltd. has shown some fluctuations over the past five years. In 2023, the cash conversion cycle stood at 37.37 days, slightly higher than the previous year. This indicates that, on average, it takes the company 37.37 days to convert its investments in inventory and other resources into cash flows from sales.

Compared to 2021 when the cash conversion cycle was 39.73 days, there has been an improvement in the efficiency of the company's working capital management in 2023. This suggests that Marten Transport, Ltd. has been able to manage its inventory, accounts receivable, and accounts payable more effectively, leading to a quicker conversion of its operating cycle into cash.

In 2019, the company had a higher cash conversion cycle of 44.05 days, indicating that it took longer to convert its resources into cash flows compared to the more recent years. Overall, the trend in the cash conversion cycle for Marten Transport, Ltd. demonstrates a generally improving efficiency in working capital management over the past five years.