Steel Dynamics Inc (STLD)

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	77.04	74.92	76.15	75.47	71.59	71.17	71.05	67.37	70.77	77.74	87.85	91.11	98.79	90.65	88.75	92.49	82.39	72.86	69.83	68.76
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	77.04	74.92	76.15	75.47	71.59	71.17	71.05	67.37	70.77	77.74	87.85	91.11	98.79	90.65	88.75	92.49	82.39	72.86	69.83	68.76

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 77.04 + — – —
= 77.04

The cash conversion cycle of Steel Dynamics Inc, a measure of how quickly the company can convert its investments in inventory back into cash flow, has shown fluctuations over the quarters analyzed. The cycle started at approximately 68.76 days on March 31, 2020, and increased gradually to peak at 98.79 days on December 31, 2021.

However, in the subsequent quarters, the cash conversion cycle began to decrease, indicating improved efficiency in managing working capital. By December 31, 2024, the cycle had decreased to 77.04 days. The company's ability to shorten the cash conversion cycle suggests more efficient management of inventory, accounts receivable, and accounts payable, facilitating better liquidity and cash flow management.

Overall, the trend in Steel Dynamics Inc's cash conversion cycle indicates efforts to optimize working capital and enhance operational efficiency. A shorter cash conversion cycle generally signifies improved financial health and agility in converting operational inputs into cash inflows.