Werner Enterprises Inc (WERN)

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	2.94	2.35	2.23	3.26	2.35
Days of sales outstanding (DSO)	days	49.71	57.86	61.92	53.07	48.67
Number of days of payables	days	22.12	20.12	18.79	22.53	24.04
Cash conversion cycle	days	30.52	40.08	45.36	33.80	26.99

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 2.94 + 49.71 – 22.12
= 30.52

The cash conversion cycle of Werner Enterprises, Inc. has shown a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle decreased to 52.29 days from 60.87 days in 2022, reflecting an improvement in the management of its working capital. This reduction indicates that the company is efficiently managing its cash flow, inventory, and receivables, allowing it to convert its investments in inventory and accounts receivable into cash more quickly.

Comparing to the data from 2021 and earlier, where the cash conversion cycle ranged from 55.57 days to 64.74 days, the recent improvement in 2023 is a positive sign of operational efficiency. A shorter cash conversion cycle indicates that the company is able to collect cash from its customers, convert inventory to sales, and pay off its suppliers more rapidly.

Overall, the decreasing trend in Werner Enterprises' cash conversion cycle suggests a more streamlined and effective management of its working capital and operations, potentially leading to improved financial performance and liquidity in the future.