Valero Energy Corporation (VLO)

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	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
Cash conversion cycle	days	17.90	14.74	15.38	13.17	11.07	10.04	10.09	13.23	12.95	19.42	23.07	33.02	34.11	27.42	20.61	10.71	19.03	15.84	16.28	14.87

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 20.99 + 31.70 – 34.79
= 17.90

The cash conversion cycle for Valero Energy Corp. has shown some fluctuation over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 16.80 days, which increased from the previous quarter. Despite the increase, the cycle remains relatively stable compared to the beginning of 2023. Valero's cash conversion cycle peaked in Q1 2022 at 11.45 days but has since trended upwards, showing a longer cash conversion cycle in recent quarters. This suggests that the company may be taking longer to convert its investments in inventory and accounts receivable into cash.

Overall, Valero Energy Corp. has experienced some variation in its cash conversion cycle over the past eight quarters, indicating potential changes in the company's working capital management efficiency. Further analysis of the underlying factors influencing the cycle's fluctuations may provide insights into how Valero can optimize its cash conversion process to improve its overall financial performance.