Reliance Steel & Aluminum Co (RS)
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 | 58.07 | 59.29 | 59.74 | 51.73 | 50.92 | 54.49 | 60.55 | 55.40 | 63.15 | 68.64 | 69.72 | 71.36 | 68.52 | 66.68 | 65.56 | 65.89 | 84.02 | 80.19 | 88.75 | 103.08 |
| Days of sales outstanding (DSO) | days | 37.18 | 40.31 | 40.18 | 39.80 | 34.35 | 39.94 | 44.24 | 48.20 | 43.59 | 50.51 | 52.00 | 51.15 | 38.46 | 37.94 | 34.56 | 41.89 | 36.75 | 40.80 | 42.99 | 44.32 |
| Number of days of payables | days | 11.66 | 12.52 | 13.56 | 14.23 | 10.52 | 12.06 | 17.09 | 17.53 | 13.88 | 18.98 | 20.07 | 17.44 | 12.51 | 12.18 | 10.85 | 14.03 | 14.04 | 18.53 | 19.67 | 25.83 |
| Cash conversion cycle | days | 83.58 | 87.09 | 86.36 | 77.30 | 74.75 | 82.37 | 87.70 | 86.07 | 92.86 | 100.16 | 101.64 | 105.07 | 94.47 | 92.44 | 89.27 | 93.75 | 106.74 | 102.45 | 112.07 | 121.57 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 58.07 + 37.18 – 11.66
= 83.58
Reliance Steel & Aluminum Co.'s cash conversion cycle has shown some fluctuations over the past eight quarters. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A longer cash conversion cycle indicates that a company takes more time to generate cash from its operational activities.
In Q4 2023, the cash conversion cycle decreased to 95.27 days compared to the previous quarter, Q3 2023, where it was 98.65 days. This suggests that the company was able to convert its investments into cash more efficiently in Q4 2023. However, the latest figure is higher than the cycle observed in Q4 2022, which was 83.42 days.
Overall, Reliance Steel & Aluminum Co. has experienced some volatility in its cash conversion cycle over the past eight quarters, with fluctuations between 83.42 days and 98.65 days. The company should aim to effectively manage its inventory and receivables to shorten its cash conversion cycle, thereby improving liquidity and cash flow management.
Peer comparison
Dec 31, 2023