Builders FirstSource Inc (BLDR)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	40.17	39.53	41.94	44.36	40.44	43.12	41.21	35.74	34.75	42.07	49.25	54.01	42.27	46.26	70.87	71.28	45.19	47.58	41.00	42.98
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	40.17	39.53	41.94	44.36	40.44	43.12	41.21	35.74	34.75	42.07	49.25	54.01	42.27	46.26	70.87	71.28	45.19	47.58	41.00	42.98

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 40.17 + — – —
= 40.17

The cash conversion cycle for Builders FirstSource Inc has shown some fluctuations over the past few years. It measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, where the company had a cash conversion cycle of 42.98 days, it decreased to a low of 34.75 days by December 31, 2022. This indicates an improvement in the efficiency of managing inventory and collecting receivables.

However, by March 31, 2023, the cash conversion cycle increased again to 35.74 days before peaking at 71.28 days by March 31, 2021. This suggests possible challenges in managing working capital and converting sales into cash during that period.

Towards December 31, 2024, the cash conversion cycle recovered to a level of 40.17 days. Overall, the company should continue monitoring and optimizing its inventory management, accounts receivable collection, and payment practices to maintain a healthy cash conversion cycle and efficient working capital utilization.