Old Dominion Freight Line Inc (ODFL)
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 38.14 | 35.26 | 41.60 | 41.30 | — |
| Number of days of payables | days | 12.52 | 11.76 | 10.00 | 9.79 | 9.64 |
| Cash conversion cycle | days | 25.62 | 23.50 | 31.59 | 31.51 | -9.64 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 38.14 – 12.52
= 25.62
From the data provided, we can observe the cash conversion cycle of Old Dominion Freight Line, Inc. over the past five years. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.
Old Dominion Freight Line's cash conversion cycle has shown some fluctuations over the years. In 2023, the company's cash conversion cycle increased to 38.29 days from 35.28 days in 2022. This suggests that the company took slightly longer to convert its investments into cash compared to the previous year.
Comparing to 2021 and 2020, where the cash conversion cycle was 41.60 days and 41.29 days, respectively, the cycle improved slightly in 2023. However, it is worth noting that the cash conversion cycle was lower in 2019 at 36.26 days compared to 2023.
Overall, a lower cash conversion cycle indicates that the company is efficiently managing its working capital by quickly converting investments into cash inflows. On the other hand, a higher cash conversion cycle may suggest inefficiencies in managing operations or collecting receivables. Further analysis of the company's operating and financial activities would provide a deeper understanding of the factors contributing to changes in the cash conversion cycle.
Peer comparison
Dec 31, 2023