Valero Energy Corporation (VLO)

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	22.63	20.00	22.35	22.29	20.99	20.25	17.99	17.57	15.44	15.45	18.02	20.68	20.62	24.25	27.39	34.22	33.54	26.16	23.37	12.89
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	22.63	20.00	22.35	22.29	20.99	20.25	17.99	17.57	15.44	15.45	18.02	20.68	20.62	24.25	27.39	34.22	33.54	26.16	23.37	12.89

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 22.63 + — – —
= 22.63

The cash conversion cycle of Valero Energy Corporation has shown fluctuations over the periods analyzed. It decreased from 12.89 days on March 31, 2020, to a low of 15.44 days on December 31, 2022. This indicates that the company was able to efficiently manage its working capital during this time frame. Subsequently, the cycle increased slightly to 22.63 days by December 31, 2024.

Analyzing the overall trend, it is observed that the cash conversion cycle generally fluctuated within a relatively narrow range, suggesting a stable working capital management strategy by Valero Energy Corporation. The company's ability to convert its investments in inventory back to cash slightly deteriorated towards the end of 2024, as indicated by the longer cash conversion cycle compared to previous periods.

Overall, while there were fluctuations in the cash conversion cycle, Valero Energy Corporation maintained a reasonable level of efficiency in managing its working capital throughout the analyzed periods, with some minor variations in performance observed over time. It is essential for the company to continuously monitor and optimize its working capital processes to ensure optimal cash flow management in the future.