Valmont Industries Inc (VMI)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 60.44 | 59.74 | 59.00 | 61.96 | 59.50 | 62.90 | 67.64 | 65.49 | 66.75 | 70.39 | 78.11 | 84.92 | 81.09 | 102.00 | 97.22 | 90.60 | 82.91 | 83.22 | 85.62 | 79.92 |
| Days of sales outstanding (DSO) | days | 58.95 | 64.80 | 63.57 | 59.69 | 58.32 | 58.07 | 55.46 | 54.19 | 51.31 | 54.28 | 58.71 | 61.43 | 60.32 | 59.38 | 64.38 | 60.48 | 65.20 | 66.63 | 67.53 | 66.15 |
| Number of days of payables | days | 38.11 | 34.58 | 32.96 | 30.33 | 32.38 | 32.28 | 32.07 | 33.28 | 33.00 | 35.51 | 38.58 | 42.53 | 38.70 | 52.68 | 53.23 | 51.07 | 49.51 | 49.98 | 45.96 | 40.12 |
| Cash conversion cycle | days | 81.28 | 89.97 | 89.61 | 91.31 | 85.45 | 88.70 | 91.03 | 86.41 | 85.05 | 89.16 | 98.24 | 103.82 | 102.71 | 108.71 | 108.37 | 100.01 | 98.59 | 99.87 | 107.19 | 105.96 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 60.44 + 58.95 – 38.11
= 81.28
The cash conversion cycle of Valmont Industries Inc has seen some fluctuations over the past few years, ranging from around 81 days to 108 days. The cash conversion cycle represents the period of time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
From December 31, 2022, to March 31, 2023, there was a notable decrease in the cash conversion cycle from 85.05 days to 86.41 days. This suggests that the company was able to more efficiently manage its inventory and accounts receivable during that period.
However, the cash conversion cycle increased again in the following quarters, peaking at 108.71 days on September 30, 2021. Subsequently, the trend reversed, and the cycle decreased to 81.28 days by December 31, 2024, indicating that Valmont Industries improved its cash conversion efficiency and liquidity management.
Overall, maintaining a lower cash conversion cycle is generally favorable as it indicates faster cash flow generation, efficient inventory management, and effective accounts receivable collection practices. Businesses aim to optimize their cash conversion cycles to enhance liquidity and operational efficiency.
Peer comparison
Dec 31, 2024