Sterling Construction Company Inc (STRL)
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 58.71 | 66.36 | 79.74 | 73.76 | 83.03 |
| Number of days of payables | days | 28.17 | 32.59 | 29.76 | 33.99 | 33.19 |
| Cash conversion cycle | days | 30.53 | 33.76 | 49.98 | 39.77 | 49.84 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 58.71 – 28.17
= 30.53
The cash conversion cycle (CCC) of Sterling Construction Company Inc demonstrates notable fluctuations over the analyzed period from December 31, 2020, to December 31, 2024.
At the end of 2020, the CCC was approximately 49.84 days, indicating that it took nearly 50 days for the company to convert its investments in inventory and other resources into cash flows from sales. This figure decreased significantly by the end of 2021 to approximately 39.77 days, reflecting an improvement in the company's efficiency in managing receivables, inventory, or payables.
However, the cycle experienced an upward shift in 2022, reaching nearly 49.98 days, nearly returning to the 2020 levels, which could suggest delays or inefficiencies in managing cash flows or extended collection periods.
Subsequently, the CCC improved markedly in 2023 to approximately 33.76 days, indicating enhanced operational efficiency and potentially faster collection of receivables, shorter inventory turnover, or extended payable periods. This downward trend persisted further in 2024, with the CCC reaching approximately 30.53 days, the lowest over the analyzed period, suggesting continuous improvements in cash flow management.
The overall trend reveals that Sterling Construction Company Inc has progressively optimized its cash cycle, resulting in shorter periods to convert investments into cash. This could reflect better management of receivables and inventories, improved payment terms with suppliers, or increased operational efficiencies. The reduction in the cash conversion cycle over the four-year span suggests a strategic focus on enhancing liquidity and operational agility.
Peer comparison
Dec 31, 2024