Valero Energy Corporation (VLO)
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 | 22.64 | 20.99 | 15.44 | 20.62 | 33.54 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 22.64 | 20.99 | 15.44 | 20.62 | 33.54 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 22.64 + — – —
= 22.64
The cash conversion cycle of Valero Energy Corporation has demonstrated a downward trend over the past five years, decreasing from 33.54 days as of December 31, 2020, to 22.64 days as of December 31, 2024. This indicates that the company has become more efficient in managing its working capital during this period.
A shorter cash conversion cycle signifies that Valero Energy Corporation is able to convert its investment in inventory into cash more quickly, reflecting improved inventory management practices. Additionally, a reduced cash conversion cycle may suggest that the company is collecting receivables more efficiently and paying its payables at a more optimized pace.
By effectively managing its cash conversion cycle, Valero Energy Corporation may have enhanced its liquidity position and operational efficiency, allowing the company to free up cash that can be reinvested in its core business operations or used to pursue growth opportunities. This trend is a positive indicator of the company's financial health and operational effectiveness.
Peer comparison
Dec 31, 2024