Valero Energy Corporation (VLO)

Activity ratios

Short-term

Turnover ratios

	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
Inventory turnover	17.39	18.02	20.28	20.76	23.64	23.61	20.24	17.64	17.69	15.05	13.32	10.66	10.87	13.94	15.61	28.30	14.76	16.45	17.21	16.75
Receivables turnover	11.51	11.98	14.39	17.94	14.75	14.66	10.72	10.01	10.91	10.92	8.83	7.04	10.63	13.60	21.10	19.69	12.05	13.66	12.46	13.86
Payables turnover	10.49	10.15	13.04	14.75	12.54	12.04	8.69	8.31	8.87	9.54	8.00	6.88	10.79	14.26	18.19	17.61	10.15	11.03	10.67	10.97
Working capital turnover	15.31	16.76	17.91	21.81	26.35	31.09	28.45	37.10	26.24	21.05	15.64	12.01	9.89	10.44	16.04	38.84	18.65	22.27	21.43	20.63

Valero Energy Corp.'s activity ratios indicate the efficiency with which the company manages its resources. The inventory turnover ratio has been gradually declining over the past eight quarters, suggesting a decrease in the speed at which inventory is sold and replenished. This may indicate potential inventory management issues or a slowing demand for Valero's products.

On the other hand, the receivables turnover ratio has shown an increasing trend, indicating that Valero is collecting its receivables more quickly. This may suggest efficient credit management practices or improved collection procedures, resulting in a faster conversion of sales into cash.

The payables turnover ratio has also been increasing over the quarters, indicating that Valero is taking longer to pay its suppliers. This may be a strategic move to manage cash flow or negotiate better payment terms with suppliers but could also potentially strain supplier relationships if not managed effectively.

Lastly, the working capital turnover ratio has been declining consistently, reflecting a decrease in the efficiency of Valero's working capital management. The company may be holding onto its working capital for longer periods, which could impact overall liquidity and operational efficiency.

Overall, a detailed analysis of Valero Energy Corp.'s activity ratios suggests some mixed signals in terms of efficiency and effectiveness in managing its inventory, receivables, payables, and working capital.

Average number of days

		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	20.99	20.26	18.00	17.58	15.44	15.46	18.03	20.69	20.63	24.26	27.40	34.25	33.57	26.18	23.38	12.90	24.72	22.20	21.20	21.79
Days of sales outstanding (DSO)	days	31.70	30.46	25.37	20.35	24.74	24.91	34.05	36.48	33.47	33.42	41.32	51.84	34.35	26.83	17.29	18.54	30.29	26.73	29.29	26.34
Number of days of payables	days	34.79	35.98	27.99	24.75	29.11	30.32	41.99	43.94	41.14	38.26	45.65	53.07	33.81	25.59	20.07	20.73	35.97	33.08	34.21	33.26

The activity ratios of Valero Energy Corp. can provide insights into how efficiently the company is managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH): This ratio measures the average number of days it takes for the company to sell its inventory. A decreasing trend in DOH from Q1 2022 to Q4 2023 indicates that Valero Energy Corp. has been able to manage its inventory more efficiently over time, turning inventory into sales quicker. However, the company should continue to monitor and optimize its inventory levels to ensure they are not too high or too low.

2. Days of Sales Outstanding (DSO): DSO indicates how long it takes for the company to collect payments from its customers. Valero Energy Corp. has shown a fluctuating trend in DSO, with higher values in Q3 and Q4 of 2022. A decreasing trend in DSO from Q3 2022 to Q1 2023 suggests an improvement in the company's accounts receivable collection efficiency. Lower DSO indicates quicker cash conversion from sales, which is generally positive for cash flow and liquidity.

3. Number of Days of Payables: This ratio measures how long it takes the company to pay its suppliers. Valero Energy Corp. has shown a decreasing trend in the number of days of payables from Q1 2022 to Q4 2023, indicating that the company is taking longer to pay its suppliers. While extending payable days can improve cash flow, it may also impact relationships with suppliers. Therefore, the company needs to strike a balance between managing cash flow and maintaining good supplier relationships.

In conclusion, Valero Energy Corp. has demonstrated improvements in managing its inventory, receivables, and payables over time, as shown by the trends in its activity ratios. Continued monitoring and optimization of these ratios will be crucial for maintaining efficiency and financial health.

Long-term

	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
Fixed asset turnover	5.15	4.98	5.12	5.65	6.13	5.56	5.03	4.24	3.90	3.10	2.65	2.09	2.26	2.67	3.08	3.48	3.70	3.78	3.92	4.04
Total asset turnover	2.29	2.38	2.58	2.89	2.88	2.86	2.41	2.17	1.96	1.72	1.45	1.18	1.25	1.47	1.78	2.22	2.01	2.13	2.17	2.20

Valero Energy Corp.'s fixed asset turnover ratio has shown a fluctuating trend over the last eight quarters, ranging from 4.27 to 5.66. This ratio indicates that for every dollar invested in fixed assets, Valero generates between $4.27 and $5.66 in sales. The increasing trend in fixed asset turnover suggests that the company has become more efficient in utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has also displayed variability, ranging from 2.18 to 2.90 over the same period. This ratio reflects how efficiently the company utilizes all its assets to generate sales. The increasing total asset turnover indicates that Valero has been improving its overall asset utilization efficiency, with each dollar of assets generating between $2.18 and $2.90 in revenue.

Overall, the trend in both fixed asset turnover and total asset turnover ratios suggests that Valero Energy Corp. has been effectively managing its assets to drive sales growth and improve operational efficiency over the past eight quarters.