Old Dominion Freight Line Inc (ODFL)

Cash conversion cycle

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
Cash conversion cycle days 23.16 25.62 23.50 31.59 31.51

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 33.10 – 9.95
= 23.16

Old Dominion Freight Line Inc's cash conversion cycle reflects the efficiency of its working capital management. The company's cash conversion cycle decreased from 31.51 days in 2020 to 23.16 days in 2024. This indicates that the company has been able to improve its operational efficiency in terms of converting its investments in raw materials into cash more swiftly.

A lower cash conversion cycle suggests that Old Dominion is managing its inventory, receivables, and payables effectively. By reducing the time it takes to convert inventory into sales and then collect cash from those sales, the company may have improved its liquidity position and overall financial performance.

Overall, the decreasing trend in Old Dominion Freight Line Inc's cash conversion cycle from 2020 to 2024 is a positive sign of efficient working capital management, which could lead to improved cash flow and profitability in the long run.


See also:

Old Dominion Freight Line Inc Cash Conversion Cycle