Old Dominion Freight Line Inc (ODFL)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	—	—	—	—	—
Receivables turnover	11.03	9.57	10.35	8.77	8.84
Payables turnover	36.70	29.16	31.03	36.49	37.30
Working capital turnover	32.30	9.84	15.51	5.72	4.61

Old Dominion Freight Line Inc's activity ratios provide insight into the efficiency of the company's operations in managing its assets and liabilities. Let's analyze the key activity ratios for the company based on the provided data:

1. Inventory Turnover: The inventory turnover ratio indicates how efficiently a company manages its inventory. Old Dominion Freight Line Inc did not provide data for this ratio for the years 2020 to 2024, implying a lack of visibility into the company's inventory management efficiency.

2. Receivables Turnover: This ratio measures the company's ability to collect outstanding receivables. Old Dominion Freight Line Inc demonstrated a relatively consistent trend in receivables turnover from 2020 to 2024, improving from 8.84 in 2020 to 11.03 in 2024. The increasing trend indicates that the company's collection of accounts receivable improved over the years, reflecting efficient credit management.

3. Payables Turnover: The payables turnover ratio shows how quickly the company pays its suppliers. Old Dominion Freight Line Inc experienced a fluctuating trend in payables turnover from 2020 to 2024, with the ratio ranging from 29.16 in 2023 to 37.30 in 2020. The reduction in payables turnover in 2023 suggests a longer payment period to suppliers, while the increase in 2024 may indicate a reversal in this trend.

4. Working Capital Turnover: This ratio measures how effectively the company utilizes its working capital to generate revenue. Old Dominion Freight Line Inc displayed a substantial improvement in working capital turnover from 2020 to 2024, with the ratio increasing from 4.61 in 2020 to 32.30 in 2024. This significant enhancement indicates that the company became more efficient in utilizing its working capital to generate sales over the years.

In conclusion, while Old Dominion Freight Line Inc's inventory turnover data was not available, the company's receivables turnover, payables turnover, and working capital turnover provide valuable insights into its efficiency in managing assets and liabilities. The improvement in receivables and working capital turnover ratios reflects positively on the company's operational efficiency, while the fluctuations in payables turnover warrant further investigation into the company's payment practices.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	—	—	—	—
Days of sales outstanding (DSO)	days	33.10	38.14	35.26	41.60	41.30
Number of days of payables	days	9.95	12.52	11.76	10.00	9.79

Old Dominion Freight Line Inc's activity ratios provide insights into the efficiency of its operations:

1. Days of Inventory on Hand (DOH): The data indicates that there is not enough information available to calculate the DOH for Old Dominion Freight Line Inc for the periods provided. This could suggest that the company manages its inventory effectively, keeping it at optimal levels to meet demand without excess.

2. Days of Sales Outstanding (DSO): The DSO reflects the average number of days it takes for the company to collect revenue after a sale. Old Dominion Freight Line Inc's DSO has shown a decreasing trend over the years, from 41.30 days in 2020 to 33.10 days in 2024. This suggests that the company has been improving its collection processes, possibly by more efficiently managing credit terms or following up on outstanding payments.

3. Number of Days of Payables: This ratio indicates the average number of days it takes for the company to pay its suppliers. Old Dominion Freight Line Inc's number of days of payables has shown a slight increase over the years, from 9.79 days in 2020 to 9.95 days in 2024. This could imply that the company is taking slightly longer to settle its payables, which could indicate improved cash flow management or negotiation of favorable payment terms with suppliers.

Overall, the data suggests that Old Dominion Freight Line Inc has been effectively managing its working capital and operational efficiency, as evidenced by improvements in DSO and relatively stable days of payables.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	1.29	1.44	1.70	1.63	1.38
Total asset turnover	1.06	1.07	1.29	1.09	0.92

Old Dominion Freight Line Inc's long-term activity ratios show the efficiency with which the company is utilizing its assets. The fixed asset turnover ratio has been fluctuating over the years, starting at 1.38 in 2020 and reaching a peak of 1.70 in 2022 before declining to 1.29 in 2024. This indicates that the company generated $1.70 in revenues for every dollar invested in fixed assets in 2022.

On the other hand, the total asset turnover ratio has also shown variability, increasing from 0.92 in 2020 to 1.29 in 2022 and then slightly declining to 1.06 in 2024. The total asset turnover ratio reflects the company's ability to generate sales in relation to its total assets.

Overall, the fixed asset turnover and total asset turnover ratios suggest that Old Dominion Freight Line Inc has been effectively utilizing its assets to generate revenue, with some fluctuations observed over the years. The increasing trend in these ratios indicates improved asset efficiency during the period under consideration.