Vulcan Materials Company (VMC)

Short-term

Turnover ratios

Based on the provided data, I analyzed Vulcan Materials Company's activity ratios:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Vulcan Materials Company showed a consistent improvement in this ratio from March 31, 2020, to December 31, 2024, with a peak of 10.39 on September 30, 2022. This indicates that the company was able to sell its inventory more frequently in recent years.

2. Receivables Turnover:
- The receivables turnover ratio, which indicates how many times a company collects its accounts receivable during a period, was not available in the data provided. Therefore, we are unable to evaluate Vulcan Materials Company's efficiency in collecting receivables.

3. Payables Turnover:
- The payables turnover ratio was not available in the data provided, making it impossible to assess how efficiently Vulcan Materials Company manages its accounts payable.

4. Working Capital Turnover:
- The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales. Vulcan Materials Company's working capital turnover ratio fluctuated over the years, with a range of 3.07 to 7.83. The company showed an improving trend in utilizing its working capital efficiently, especially from March 31, 2022, to December 31, 2024.

In conclusion, Vulcan Materials Company demonstrated improvements in its inventory turnover and working capital turnover ratios, suggesting enhanced efficiency in managing inventory and utilizing working capital effectively. However, the lack of data for receivables turnover and payables turnover limits a comprehensive analysis of the company's overall activity efficiency.

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Average number of days

The activity ratios provided for Vulcan Materials Company are as follows:

1. Days of Inventory on Hand (DOH):
- The number of days of inventory on hand was relatively stable from March 2020 to September 2021, ranging between 46.24 days and 49.25 days.
- There was a significant decrease in DOH from March 2022 to September 2024, with the lowest being 35.14 days in September 2022.
- However, the DOH increased slightly to 38.52 days by December 31, 2023, and further to 45.93 days by December 31, 2024.
- Generally, a lower DOH indicates that the company is managing its inventory efficiently and selling products at a faster rate.

2. Days of Sales Outstanding (DSO):
- The data for Days of Sales Outstanding is not available for any of the periods mentioned.
- DSO is a measure of how long it takes for a company to collect payments from its credit sales. The absence of data makes it challenging to assess the company's efficiency in collecting its accounts receivable.

3. Number of Days of Payables:
- Similar to DSO, there is no information provided for the Number of Days of Payables for any of the periods mentioned.
- This ratio measures how long a company takes to pay its suppliers. Without this information, it is difficult to evaluate the company's management of its payables and cash flow.

In summary, based on the Days of Inventory on Hand data, Vulcan Materials Company showed improvements in inventory management efficiency up to September 2022, with a subsequent increase in inventory days to December 2024. However, without information on DSO and the number of days of payables, a comprehensive assessment of the company's overall activity and working capital management is limited.

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Long-term

Based on the provided data for Vulcan Materials Company, the fixed asset turnover ratio measures the company's efficiency in generating sales revenue from its investment in fixed assets.

- The fixed asset turnover ratio has fluctuated over the years, ranging from 0.89 to 1.24. This ratio indicates that the company, on average, generated between $0.89 to $1.24 in revenue for every dollar invested in fixed assets.
- A higher fixed asset turnover ratio is generally preferred as it signifies that the company is utilizing its fixed assets more efficiently to generate sales.

Moving on to the total asset turnover ratio, this metric assesses how effectively the company uses its total assets to generate revenue.

- The total asset turnover ratio for Vulcan Materials Company ranged from 0.37 to 0.55 during the period analyzed. This ratio indicates that, on average, the company generated between $0.37 to $0.55 in revenue for every dollar of assets it owned.
- An increasing trend in the total asset turnover ratio suggests that the company is becoming more efficient in generating sales relative to its asset base.

In conclusion, the company's fixed asset turnover and total asset turnover ratios provide insights into its operational efficiency and asset utilization. Monitoring these ratios over time can help identify trends that may indicate improvements or challenges in Vulcan Materials Company's long-term activity performance.