Vulcan Materials Company (VMC)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	38.52	36.73	45.53	45.80	45.54
Days of sales outstanding (DSO)	days	—	42.19	51.49	38.55	39.42
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	38.52	78.92	97.02	84.35	84.96

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 38.52 + — – —
= 38.52

The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash generated from sales. Vulcan Materials Co's cash conversion cycle has shown fluctuations over the past five years.

In 2023, the cash conversion cycle improved to 80.25 days, a decrease from 2022 and 2021. This indicates that the company was more efficient in managing its inventory, collecting receivables, and paying its payables.

Comparing to 2020 and 2019, the cash conversion cycle in 2023 was lower, suggesting that Vulcan Materials Co was able to manage its working capital more effectively during this period.

Overall, a downward trend in the cash conversion cycle is positive as it indicates that Vulcan Materials Co is efficiently managing its working capital and generating cash flow from its operations. Lowering the cash conversion cycle typically implies faster conversion of investments into cash, which may lead to improved liquidity and financial performance.