CHR profits are up..

Actually, they have lots of overhead. They pay the truck long before they get paid from the shipper. That's a huge risk if the shipper doesn't pay.

 

maybe my math is off but if hey had earnings of $95.5 million on $1.95 billion in revenue and without a calculator handy that earnings would be somewhere in the neighborhood of .45 cents on the dollar give or take, not .05

 

Receivables aren't included in overhead, but I get your point.

However, what CHR does as far a receivables go is no different than an asset- based carrier. NET 30 payment terms are the industry standard, so a 'real' carrier pays its driver, fuel, equipment costs, insurance, customer service reps, sales reps, etc., long before they receive payment from the customer. Cash flow is part of the risk involved with operating any business. My point is that CHR should be greatly outperforming asset- based carriers as far as OR goes, because they don't have the fixed costs of equipment, fuel, terminal leases, etc. However, this is not the case.

 

If I understand you correctly, I think your math is off.

I don't know if you mean that they are making 45 cents on the dollar or .45 cents (like 1/2 of a cent) on the dollar.

If they were making 45 cents on the dollar, then they would be earning about $877 million on $1.95 billion.

If you mean that they were making .45 cents (less than 1/2 of a cent) then they would only be earning $8.7 million on $1.95 billion.

With revenue of $1.95 billion and earnings of $95.5 million, that comes out to $.0489 or about 5 cents earned on every dollar taken in, for an operating ratio of 95.21.

 

oops my bad got million and billion mixed up guess I shouldn't be reading theses posts so late at night /early in the morning.