Topbuild Corp (BLD)
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 | 29.82 | 29.44 | 31.86 | 35.04 | 36.91 | 38.67 | 40.91 | 40.97 | 41.48 | 26.77 | 24.75 | 24.03 | 24.28 | 21.82 | 22.50 | 23.15 | 22.79 | 23.84 | 25.83 | 29.39 |
| Days of sales outstanding (DSO) | days | 56.95 | 62.33 | 61.64 | 60.38 | 61.63 | 62.57 | 65.50 | 69.20 | 70.84 | 60.61 | 60.58 | 60.96 | 57.92 | 60.50 | 58.99 | 59.91 | 60.31 | 64.51 | 63.75 | 62.54 |
| Number of days of payables | days | 38.39 | 37.57 | 38.77 | 37.43 | 40.98 | 44.13 | 48.22 | 49.78 | 54.31 | 50.75 | 49.42 | 48.47 | 49.90 | 47.72 | 44.78 | 46.32 | 47.08 | 48.78 | 49.66 | 51.46 |
| Cash conversion cycle | days | 48.38 | 54.20 | 54.72 | 58.00 | 57.55 | 57.12 | 58.18 | 60.40 | 58.01 | 36.64 | 35.91 | 36.52 | 32.30 | 34.60 | 36.71 | 36.73 | 36.02 | 39.57 | 39.92 | 40.47 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 29.82 + 56.95 – 38.39
= 48.38
The cash conversion cycle for TopBuild Corp has shown some fluctuations over the past eight quarters. The trend indicates that the company's ability to convert its investments in raw materials and other inputs into cash has varied over time.
In Q4 2023, the cash conversion cycle was 45.48 days, showing an improvement from the previous quarter, where it was 51.40 days. This suggests that the company was able to manage its working capital more efficiently in the most recent quarter.
However, when looking at the longer-term trend, the cash conversion cycle has generally been fairly consistent, ranging from 55 to 57 days over the past two years. This indicates that TopBuild Corp typically takes around two months to convert its investments in inventory and accounts receivable into cash.
Overall, while there have been some fluctuations in the cash conversion cycle, TopBuild Corp appears to have a relatively stable working capital management strategy, with room for improvement in reducing the cycle further to enhance cash flow efficiency.