Rush Enterprises A Inc (RUSHA)

Cash conversion cycle

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Days of inventory on hand (DOH) days 104.02 114.25 108.94 117.69 103.84 98.64 98.26 92.58 92.93 96.10 100.29 95.09 92.31 67.98 73.70 84.43 81.15 87.51 85.67 91.56
Days of sales outstanding (DSO) days 17.00 13.18 13.24 14.05 13.03 12.36 11.28 11.25 12.87 12.34 14.28 12.49 11.83 10.72 11.72 14.59 15.14 11.87 11.41 13.63
Number of days of payables days 14.20 10.10 9.58 10.49 9.35 10.45 11.21 12.38 11.16 13.20 13.82 14.65 11.07 11.55 11.24 13.11 10.47 10.26 8.36 9.45
Cash conversion cycle days 106.81 117.32 112.59 121.25 107.53 100.55 98.33 91.45 94.64 95.24 100.75 92.94 93.07 67.15 74.18 85.91 85.83 89.12 88.72 95.74

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 fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle indicates the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

The trend in Rush Enterprises A Inc's cash conversion cycle indicates that the company's efficiency in managing its working capital has varied. Initially, the cycle was around 95.74 days in March 2020 and gradually decreased to a low of 67.15 days by September 30, 2021. This decline suggests that the company was able to improve its inventory management and collection of receivables, resulting in a shorter cash conversion cycle.

However, from December 31, 2021, to June 30, 2024, there was an increase in the cash conversion cycle, reaching a peak of 121.25 days on March 31, 2024. This may indicate that Rush Enterprises A Inc faced challenges in maintaining efficient working capital management during this period, possibly due to slower inventory turnover or delays in collecting receivables.

Overall, fluctuations in the cash conversion cycle can impact a company's liquidity and cash flow management. It is important for Rush Enterprises A Inc to closely monitor its working capital components to optimize efficiency and ensure a healthy cash conversion cycle in the future.