XPO Logistics Inc (XPO)
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 | — | 1.01 | 0.88 | — | — |
| Days of sales outstanding (DSO) | days | 45.86 | 45.12 | 106.68 | 170.78 | 85.43 |
| Number of days of payables | days | 49.98 | 30.95 | 17.57 | 28.68 | 38.52 |
| Cash conversion cycle | days | -4.12 | 15.18 | 89.99 | 142.10 | 46.91 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 45.86 – 49.98
= -4.12
The cash conversion cycle of XPO Inc has fluctuated over the past five years, indicating varying efficiency in managing its working capital.
Dec 31, 2023: The company experienced a negative cash conversion cycle of -64.47 days, which suggests that XPO's operating cycle is shorter than its payables deferral period and receivables collection period. This may indicate potential issues with managing cash flow efficiently.
Dec 31, 2022: The cash conversion cycle increased significantly to 6.66 days, indicating a longer time for the company to convert its investments in inventory back into cash. This could potentially strain liquidity and working capital management.
Dec 31, 2021: The cash conversion cycle further increased to 14.70 days, reflecting a slower conversion of inventory into sales and then into cash. This may be a signal of potential inefficiencies in operations or inventory management.
Dec 31, 2020: The cash conversion cycle decreased to 6.48 days, which suggests an improvement compared to the previous year. This indicates a shorter time to convert sales back into cash and reflects better working capital management.
Dec 31, 2019: The cash conversion cycle was at 3.95 days, showing a slight improvement in efficiency in working capital management compared to the previous year.
Overall, the fluctuating trend in XPO Inc's cash conversion cycle indicates the need for close monitoring and potential improvements in managing the company's working capital components, such as inventory, accounts receivable, and accounts payable, to optimize cash flow and operating efficiency.
Peer comparison
Dec 31, 2023