Rush Enterprises A Inc (RUSHA)

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	103.84	92.93	92.31	81.15	101.17
Days of sales outstanding (DSO)	days	13.03	12.87	11.83	15.14	12.61
Number of days of payables	days	9.35	11.16	11.07	10.47	10.20
Cash conversion cycle	days	107.53	94.64	93.07	85.83	103.58

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 103.84 + 13.03 – 9.35
= 107.53

The cash conversion cycle of Rush Enterprises A Inc has fluctuated over the past five years. In 2023, the cash conversion cycle increased to 107.53 days from 94.64 days in 2022, indicating a slower conversion of investments in inventory and receivables into cash. This could suggest potential issues with inventory management or extending credit terms to customers.

Comparing to previous years, the cash conversion cycle was relatively higher in 2019 at 103.58 days but decreased to 85.83 days in 2020, showing an improvement in the company's ability to manage its working capital efficiently. However, this positive trend reversed in 2021 and 2022 before increasing again in 2023.

Overall, the variability in the cash conversion cycle over the past five years may indicate fluctuations in Rush Enterprises A Inc's operational efficiency, working capital management, and liquidity position. Further analysis of the company's inventory turnover, accounts receivable collection period, and accounts payable payment period could provide more insights into the factors influencing the cash conversion cycle.