Rush Enterprises A Inc (RUSHA)
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 | 104.02 | 103.84 | 92.93 | 92.31 | 81.15 |
| Days of sales outstanding (DSO) | days | 17.00 | 13.03 | 12.87 | 11.83 | 15.14 |
| Number of days of payables | days | 14.20 | 9.35 | 11.16 | 11.07 | 10.47 |
| Cash conversion cycle | days | 106.81 | 107.53 | 94.64 | 93.07 | 85.83 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 104.02 + 17.00 – 14.20
= 106.81
The cash conversion cycle of Rush Enterprises A Inc has shown an increasing trend over the years, indicating a lengthening time period for the company to convert its investments in inventory and other resources into cash inflows.
In December 31, 2020, the cash conversion cycle was 85.83 days, but by December 31, 2024, it had increased to 106.81 days. This suggests that the company is taking longer to sell its inventory, collect receivables, and pay its suppliers.
The rising cash conversion cycle may point to potential inefficiencies in the company's working capital management or challenges in operations. It's essential for Rush Enterprises A Inc to closely monitor and assess its inventory turnover, accounts receivable collection, and accounts payable management to optimize its cash conversion cycle and improve its overall liquidity position.
Peer comparison
Dec 31, 2024