Rush Enterprises A Inc (RUSHA)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	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	101.17	101.47	115.61	116.14
Days of sales outstanding (DSO)	days	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	12.61	14.08	15.24	13.90
Number of days of payables	days	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	10.20	10.09	11.06	11.81
Cash conversion cycle	days	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	103.58	105.45	119.78	118.22

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 shown fluctuations over the past few quarters. The cash conversion cycle indicates the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

Looking at the trend, we can observe that the cash conversion cycle has decreased from the end of 2021 to the third quarter of 2023, with some minor fluctuations along the way. This suggests that the company has improved its efficiency in managing its working capital.

However, it is important to note that the cash conversion cycle increased toward the end of 2023 compared to the previous quarter, indicating a potential slowdown in the company's ability to convert its investments into cash during that period. This could be a result of various factors such as changes in inventory management, accounts receivable collection, or payment cycles.

Overall, monitoring the cash conversion cycle is crucial for understanding how efficiently the company is managing its resources and generating cash flows, and further analysis may be needed to identify the specific drivers behind the fluctuations observed.