Old Dominion Freight Line Inc (ODFL)

Working capital turnover

		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
Revenue (ttm)	US$ in thousands	5,885,610	5,867,450	5,955,860	6,210,120	6,262,120	6,180,360	5,976,720	5,628,680	5,256,110	4,918,280	4,576,400	4,153,200	4,014,576	3,950,876	3,941,166	4,105,626	4,108,645	4,126,375	4,136,145	4,108,975
Total current assets	US$ in thousands	1,143,330	954,216	730,609	896,950	933,740	1,111,200	1,209,090	1,280,960	1,383,790	1,278,850	1,311,120	1,223,260	1,243,340	1,138,500	968,570	831,006	866,834	806,978	741,420	783,878
Total current liabilities	US$ in thousands	544,658	552,350	503,018	569,520	529,793	639,327	628,178	578,596	464,234	534,291	482,018	513,862	373,130	449,288	494,174	428,295	366,085	396,862	386,105	358,155
Working capital turnover		9.83	14.60	26.17	18.97	15.50	13.10	10.29	8.01	5.72	6.61	5.52	5.85	4.61	5.73	8.31	10.19	8.20	10.06	11.64	9.65

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $5,885,610K ÷ ($1,143,330K – $544,658K)
= 9.83

Old Dominion Freight Line, Inc.'s working capital turnover has shown a fluctuating trend over the past eight quarters, with significant variations in performance. The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales. A higher turnover ratio indicates more efficient management of working capital.

In Q2 2023, the company achieved an impressive working capital turnover of 26.15, showcasing a substantial improvement in efficiency compared to the previous quarters. This suggests that Old Dominion Freight Line, Inc. was able to generate $26.15 in revenue for every $1 of working capital invested during that period.

While Q2 2023 stood out as a peak in performance, the company also demonstrated strong performance in Q3 2023 and Q4 2022, with working capital turnover ratios of 14.59 and 15.50, respectively. These quarters indicate that the company managed its working capital efficiently and effectively to generate sales revenue at a commendable rate.

However, there were quarters where the working capital turnover ratio dipped, such as Q1 2022 with a ratio of 8.01, reflecting a less efficient utilization of working capital. It is essential for the company to consistently monitor and manage its working capital to ensure optimal efficiency in generating sales.

Overall, Old Dominion Freight Line, Inc. should aim to sustain the high working capital turnover achieved in Q2 2023 and work towards improving efficiency in periods where the ratio falls below optimal levels to support its financial performance and growth objectives.