United Rentals Inc (URI)

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	7.94	8.65	9.15	8.81	8.78	8.99	10.00	11.32	12.74	10.92	11.60	10.80	10.21	10.71	11.62	7.86	8.53	7.26	7.00	7.33
Days of sales outstanding (DSO)	days	56.06	58.39	55.92	55.78	56.79	59.79	59.18	59.86	62.83	63.47	59.68	57.60	63.00	63.43	58.00	54.09	56.27	55.50	49.68	55.11
Number of days of payables	days	29.69	49.85	56.34	40.64	38.78	50.14	63.75	56.96	62.55	64.26	62.09	49.94	50.80	68.19	59.90	38.76	31.81	36.38	20.66	30.87
Cash conversion cycle	days	34.31	17.19	8.73	23.96	26.80	18.64	5.43	14.22	13.02	10.13	9.19	18.46	22.41	5.95	9.72	23.19	32.99	26.39	36.01	31.57

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 is an important metric that reflects how efficiently a company manages its cash flows related to its operating cycle. For United Rentals Inc, the cash conversion cycle has shown fluctuations over the periods under review.

From March 31, 2020, to December 31, 2024, the cash conversion cycle of United Rentals Inc varied between 5.43 days and 36.01 days. The trend indicates a general improvement in the company's management of cash flows over the years, with more recent periods showing shorter cash conversion cycles.

In detail, the company managed to significantly reduce its cash conversion cycle from a high of 36.01 days on June 30, 2020, to a low of 5.43 days on June 30, 2023. This signifies improvements in managing receivables, inventory, and payables, leading to faster cash conversion.

However, there were some fluctuations seen in the cycle, with increases observed in some periods, such as on September 30, 2023, and December 31, 2024. These increases may indicate challenges in certain aspects of the company's operations, such as delays in collecting receivables or managing inventory efficiently.

Overall, the decreasing trend in the cash conversion cycle for United Rentals Inc suggests improvements in working capital management, which can enhance the company's liquidity and financial health. It is essential for the company to continue monitoring and optimizing its cash conversion cycle to ensure efficient use of cash resources and sustainable business operations.