United Rentals Inc (URI)

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	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	7.71	8.63	9.44	9.07
Days of sales outstanding (DSO)	days	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	59.72	63.27	63.05	64.38
Number of days of payables	days	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	29.17	55.70	52.57	41.06
Cash conversion cycle	days	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	38.26	16.20	19.91	32.39

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 8.78 + 56.79 – 38.78
= 26.80

The cash conversion cycle (CCC) measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A positive CCC indicates that a company takes longer to collect cash from its sales, while a negative CCC suggests a faster timeframe.

Looking at the data for United Rentals, Inc., the CCC has varied significantly over the past eight quarters. In the most recent quarter, ending December 31, 2023, the company had a CCC of 15.38 days, indicating that it took approximately 15 days to convert its investments in inventory and other resources into cash flows from sales.

In the previous quarter, ending September 30, 2023, the company significantly improved its CCC to 3.02 days, suggesting a more efficient cash conversion process. However, in the quarter ending June 30, 2023, the CCC was negative, indicating that the company was able to convert its investments into cash flows from sales at a faster pace, potentially improving its liquidity position.

Notably, in the quarters ending March 31, 2023, and December 31, 2022, the CCC remained negative, reflecting consistent efficiency in converting investments into cash flows from sales. However, in the quarters ending September 30, 2022, and June 30, 2022, the CCC was also negative, suggesting a potentially more efficient cash conversion process during those periods.

Overall, the fluctuating nature of the CCC for United Rentals, Inc. may indicate varying levels of efficiency in managing working capital and converting investments into cash flows from sales. This variability could be influenced by factors such as changes in inventory management, sales terms, and the timing of payments from customers. Further analysis and context regarding the company's operations and industry conditions would be beneficial in fully assessing the implications of these CCC fluctuations.