Vulcan Materials Company (VMC)

Liquidity ratios

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio 1.83 3.17 1.99 2.20 2.17
Quick ratio 0.45 1.17 0.17 0.31 1.18
Cash ratio 0.45 1.17 0.17 0.31 1.18

The current ratio for Vulcan Materials Company has shown fluctuations over the years, ranging from a low of 1.83 in December 31, 2024, to a high of 3.17 in December 31, 2023. The company's current assets have consistently exceeded its current liabilities, indicating a strong ability to meet short-term obligations. However, the decreasing trend in the current ratio from 2023 to 2024 may raise concerns about the company's liquidity position in the most recent period.

The quick ratio, which measures the company's ability to meet its short-term obligations using its most liquid assets, such as cash and accounts receivable, has also exhibited variability. The quick ratio dropped sharply to 0.17 in December 31, 2022, indicating a potential challenge in meeting immediate financial needs with only liquid assets. While there was an improvement in the quick ratio in 2023, it decreased again in 2024, suggesting ongoing liquidity risks for Vulcan Materials Company.

The cash ratio, which specifically evaluates the company's ability to cover its current liabilities with cash and cash equivalents, mirrors the trend observed in the quick ratio. Vulcan Materials Company had a cash ratio of 1.18 in December 31, 2020, which fell to 0.45 in December 31, 2024. This declining trend indicates a potential reduction in the company's ability to settle its short-term obligations solely with available cash reserves.

In conclusion, while Vulcan Materials Company has generally maintained current ratios above 1.0, indicating sufficient liquidity to cover short-term liabilities, the decreasing trend in the quick and cash ratios highlights potential challenges in meeting immediate financial obligations with liquid assets alone. It may be advisable for the company to closely monitor its liquidity position and consider strategies to enhance its short-term financial stability.


Additional liquidity measure

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash conversion cycle days 45.93 38.52 36.73 45.53 45.80

The cash conversion cycle of Vulcan Materials Company has shown some fluctuations over the past five years. At the end of December 2020, the company's cash conversion cycle stood at 45.80 days, indicating that it took approximately 45.80 days for the company to convert its investments in raw materials and other inputs into cash receipts from sales.

By the end of December 2021, the cash conversion cycle had improved slightly to 45.53 days, suggesting a small efficiency gain in managing working capital. However, in December 2022, there was a significant decline in the cash conversion cycle to 36.73 days, indicating that the company was able to convert its investments in materials into cash receipts more quickly than in the previous years.

The trend continued into December 2023, with the cash conversion cycle slightly increasing to 38.52 days but still remaining below the levels seen in 2020 and 2021. However, by the end of December 2024, the cash conversion cycle increased again to 45.93 days, approaching the levels seen at the end of 2020.

Overall, while there have been fluctuations in Vulcan Materials Company's cash conversion cycle over the past five years, there seems to have been some improvement in managing working capital efficiency in 2022. However, the company experienced challenges in maintaining this efficiency in the subsequent years. It is important for the company to focus on optimizing its cash conversion cycle to ensure efficient management of working capital and maximize cash flows.