Valaris Ltd (VAL)
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 | — | 11.34 | — | — | 36.22 | 3.71 | 4.28 | 5.16 | 6.04 | 39.93 | 6.45 | 36.17 | 10.13 | 32.09 | 34.51 | 56.37 | 55.22 | 56.77 | 56.68 | 57.84 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 0.00 | 11.34 | 0.00 | 0.00 | 36.22 | 3.71 | 4.28 | 5.16 | 6.04 | 39.93 | 6.45 | 36.17 | 10.13 | 32.09 | 34.51 | 56.37 | 55.22 | 56.77 | 56.68 | 57.84 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00
The cash conversion cycle (CCC) of Valaris Ltd, which is a measure of the company's efficiency in managing its working capital, has shown some fluctuations over the past few years. The CCC represents the number of days it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 2020 to September 2020, the CCC remained relatively stable, fluctuating between 56 to 58 days. However, from December 2020 onwards, there was a significant improvement in the CCC, with a noticeable downward trend in the number of days required to convert resources into cash.
By June 2021, the CCC had decreased substantially to 34.51 days, indicating that Valaris Ltd was managing its working capital more efficiently. This trend continued, with the CCC dropping to as low as 3.71 days by September 2023, showing a remarkable improvement in cash conversion efficiency.
However, there was a slight increase in the CCC by December 2023, rising to 36.22 days, before dropping again to 0 days in the following quarters. The CCC remained at 0 days for the last two quarters of 2024, suggesting that Valaris Ltd was managing its working capital exceptionally well during this period.
Overall, the data indicates that Valaris Ltd has made significant progress in optimizing its cash conversion cycle, which is a positive sign for the company's financial health and operational efficiency. Efficient management of working capital is crucial for maintaining liquidity and driving sustainable growth in the long term.
Peer comparison
Dec 31, 2024