United Rentals Inc (URI)

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	7.94	8.78	12.74	10.21	8.53
Days of sales outstanding (DSO)	days	56.06	56.79	62.83	63.00	56.27
Number of days of payables	days	29.69	38.78	62.55	50.80	31.81
Cash conversion cycle	days	34.31	26.80	13.02	22.41	32.99

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 7.94 + 56.06 – 29.69
= 34.31

The cash conversion cycle (CCC) of United Rentals Inc has shown fluctuations over the past five years. As of December 31, 2020, the CCC was 32.99 days, indicating that it took the company approximately 33 days to convert its investments in inventory and other resources back into cash. By the end of 2021, the CCC improved to 22.41 days, demonstrating a more efficient conversion of resources into cash.

In 2022, the CCC further decreased to 13.02 days, showcasing an even more effective management of the cash conversion process. However, there was a slight increase in the CCC by the end of 2023 to 26.80 days, suggesting that the conversion process may have slowed down temporarily.

By the end of 2024, the CCC increased again to 34.31 days, which implies that United Rentals Inc took longer to convert its resources into cash compared to the previous year. Overall, the company's cash conversion cycle has shown fluctuations, with periods of improvement followed by slight setbacks in the efficient management of its working capital.