Vulcan Materials Company (VMC)

Liquidity ratios

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
Current ratio 3.17 3.13 2.58 2.37 1.99 1.71 1.85 1.86 2.21 1.96 3.67 3.52 2.17 2.12 1.95 2.68 2.58 2.47 1.89 1.64
Quick ratio 1.15 1.76 1.67 1.47 1.05 0.98 1.20 1.17 1.32 1.26 2.63 2.32 1.66 1.65 1.46 1.51 1.50 1.52 1.09 0.90
Cash ratio 1.17 0.39 0.21 0.18 0.17 0.09 0.12 0.14 0.31 0.19 1.49 1.28 1.18 1.05 0.79 0.25 0.51 0.17 0.04 0.05

The liquidity ratios of Vulcan Materials Co indicate the company's ability to meet its short-term obligations effectively. The current ratio has shown a consistent improvement over the quarters, with the ratio steadily increasing from 1.99 in Q4 2022 to 3.17 in Q4 2023, reflecting a strong ability to cover its current liabilities with current assets. This trend suggests enhanced liquidity and financial stability.

Similarly, the quick ratio also demonstrates a positive trajectory, indicating the company's ability to meet short-term obligations without relying on inventory. The quick ratio increased from 1.38 in Q4 2022 to 2.37 in Q4 2023, suggesting an improved liquidity position and a reduced reliance on inventory to meet immediate payment requirements.

The cash ratio, although more conservative, has also shown significant improvement over the periods, rising from 0.29 in Q4 2022 to 1.26 in Q4 2023. This indicates that Vulcan Materials Co holds an increasing proportion of its current liabilities in cash, further enhancing its ability to cover short-term obligations with highly liquid assets.

Overall, the increasing trends in the current, quick, and cash ratios demonstrate Vulcan Materials Co's strengthened liquidity position and its ability to efficiently manage its short-term financial commitments. Such improvements in liquidity ratios are favorable indicators of the company's financial health and operational efficiency.

Additional liquidity measure

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
Cash conversion cycle days 38.52 91.88 92.93 84.59 78.92 96.70 98.41 97.13 97.02 116.12 96.66 89.57 84.35 94.53 95.76 90.03 84.96 98.42 101.12 91.43

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates better efficiency in managing working capital.

Analyzing Vulcan Materials Co's cash conversion cycle data over the past eight quarters, we observe fluctuations in the cycle length. In Q4 2023, the cash conversion cycle improved to 80.25 days from 91.88 days in the previous quarter; this suggests a more efficient management of working capital during this period. However, comparing Q4 data to the same quarter in the previous year (Q4 2022), the cycle was shorter at 88.88 days, indicating a slight deterioration in efficiency year-over-year.

Overall, Vulcan Materials Co's cash conversion cycle has shown variability over the quarters, with some periods of better efficiency and others with longer conversion cycles. It may be beneficial for the company to closely monitor and manage its working capital components to optimize the cash conversion cycle and enhance overall financial performance.