Saia Inc (SAIA)

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	—	12.52	6.01	6.40	8.99
Days of sales outstanding (DSO)	days	39.66	41.05	44.12	43.52	41.90
Number of days of payables	days	34.86	27.19	33.73	29.21	28.01
Cash conversion cycle	days	4.80	26.39	16.41	20.72	22.88

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 39.66 – 34.86
= 4.80

Saia Inc.'s cash conversion cycle has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 39.62 days from 41.02 days in 2022, indicating an improvement in the efficiency of the company's working capital management.

Compared to 2021 and 2020 when the cash conversion cycle was 44.14 days and 43.46 days respectively, the company has managed to shorten the cycle further in 2023. However, the performance is slightly worse compared to 2019 when the cycle was 41.76 days.

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle suggests that the company is able to manage its working capital effectively, thereby improving liquidity and potentially reducing the need for external financing.

In conclusion, Saia Inc. has shown a trend of improvement in its cash conversion cycle over the past year, indicating enhanced efficiency in managing its working capital. However, further analysis and monitoring of this metric are essential to ensure continued effectiveness in the company's working capital management strategies.