Valmont Industries Inc (VMI)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 60.44 | 59.50 | 82.63 | 81.09 | 60.77 |
| Days of sales outstanding (DSO) | days | 58.72 | 58.34 | 50.75 | 60.30 | 65.44 |
| Number of days of payables | days | 38.11 | 32.38 | 40.86 | 38.70 | 36.29 |
| Cash conversion cycle | days | 81.05 | 85.46 | 92.53 | 102.69 | 89.92 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 60.44 + 58.72 – 38.11
= 81.05
The cash conversion cycle of Valmont Industries Inc has exhibited fluctuations over the past five years. In 2020, the cash conversion cycle stood at 89.92 days, indicating the number of days it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
Between 2020 and 2021, there was an increase in the cash conversion cycle to 102.69 days, suggesting a longer period to convert investments into cash. However, the subsequent years showed a decline in the cycle, with 2024 recording the lowest figure of 81.05 days.
Overall, the downward trend in the cash conversion cycle from 2021 to 2024 indicates an improvement in Valmont Industries' efficiency in managing its working capital and converting it into cash. Nonetheless, continuous monitoring and optimization of this cycle are crucial for the company to sustain its cash flow operations effectively.
Peer comparison
Dec 31, 2024