Vulcan Materials Company (VMC)

Analyzing Vulcan Materials Co's liquidity ratios over the past five years reveals fluctuations in its ability to meet short-term obligations. The current ratio, a broad measure of liquidity, has shown improvement from 2019 to 2023, with a peak of 3.17 in 2023. This indicates a significant increase in current assets relative to current liabilities, suggesting strong short-term solvency.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, also demonstrates a similar trend of improvement over the years, reaching 2.37 in 2023. This indicates the company's ability to meet immediate obligations without relying on selling inventory.

The cash ratio, a stringent measure of liquidity that only considers cash and cash equivalents, shows variability in Vulcan Materials Co's cash position. The ratio improved significantly from 2019 to 2023, reaching 1.26 in 2023. This suggests an increased ability to cover current liabilities with cash on hand, highlighting a stronger cash position.

Overall, the trends in Vulcan Materials Co's liquidity ratios indicate a positive trajectory in its ability to meet short-term obligations, with improvements in current, quick, and cash ratios over the past five years. This suggests that the company has enhanced its liquidity position and may be better positioned to weather short-term financial challenges.

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Additional liquidity measure

The cash conversion cycle of Vulcan Materials Co has demonstrated fluctuations over the past five years. In 2023, the company's cash conversion cycle improved to 80.25 days from 88.88 days in the previous year. This signifies that Vulcan Materials Co was able to convert its investments in inventory and receivables into cash more efficiently in 2023.

Comparing the cash conversion cycle to the data from 2021, we observe a notable reduction from 100.67 days to 80.25 days in 2023. This indicates a significant improvement in the company's working capital management efficiency over the two-year period.

In 2020 and 2019, the cash conversion cycle was relatively stable at 87.60 days and 87.76 days, respectively. This suggests that Vulcan Materials Co maintained a consistent level of efficiency in converting its investments in inventory and receivables into cash during those years.

Overall, the trend in Vulcan Materials Co's cash conversion cycle indicates a more efficient conversion of resources into cash in 2023, reflecting potential improvements in inventory management and collection of receivables.