Builders FirstSource Inc (BLDR)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 40.17 | 40.44 | 34.75 | 42.27 | 45.19 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 40.17 | 40.44 | 34.75 | 42.27 | 45.19 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 40.17 + — – —
= 40.17
Builders FirstSource Inc's cash conversion cycle has shown a decreasing trend over the years from 2020 to 2024, indicating an improvement in the company's efficiency in managing its working capital.
In December 2020, the cash conversion cycle was 45.19 days, which decreased to 42.27 days by December 2021. This reduction suggests that the company was able to convert its inventory into sales and eventually into cash more quickly in 2021 compared to 2020.
By December 2022, the cash conversion cycle further decreased to 34.75 days, indicating a significant improvement in the company's working capital management. However, by December 2023, there was a slight increase in the cash conversion cycle to 40.44 days, suggesting a temporary slowdown in the company's cash conversion efficiency.
In December 2024, the cash conversion cycle remained relatively stable at 40.17 days, showing that the company was able to maintain its efficiency in converting its working capital components into cash.
Overall, the decreasing trend in the cash conversion cycle from 2020 to 2024 indicates that Builders FirstSource Inc has been effectively managing its inventory, accounts receivable, and accounts payable to optimize its cash flow operations. This improvement suggests that the company has been able to enhance its liquidity position and operational efficiency over the years.
Peer comparison
Dec 31, 2024