Valmont Industries Inc (VMI)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 62.53 | 66.11 | 71.17 | 68.82 | 66.75 | 70.39 | 78.11 | 84.92 | 81.09 | 102.00 | 97.22 | 90.60 | 82.91 | 83.22 | 85.62 | 79.92 | 79.03 | 71.37 | 76.14 | 74.61 |
| Days of sales outstanding (DSO) | days | 58.14 | 57.89 | 55.29 | 54.03 | 51.31 | 54.28 | 58.71 | 61.43 | 60.32 | 59.38 | 64.38 | 60.48 | 65.20 | 66.63 | 67.53 | 66.15 | 64.01 | 66.50 | 67.59 | 69.02 |
| Number of days of payables | days | 34.03 | 33.92 | 33.74 | 34.97 | 33.00 | 35.51 | 38.58 | 42.53 | 38.70 | 52.68 | 53.23 | 51.07 | 49.51 | 49.98 | 45.96 | 40.12 | 37.39 | 37.37 | 42.73 | 41.37 |
| Cash conversion cycle | days | 86.64 | 90.08 | 92.71 | 87.88 | 85.05 | 89.16 | 98.24 | 103.82 | 102.71 | 108.71 | 108.37 | 100.01 | 98.59 | 99.87 | 107.19 | 105.96 | 105.64 | 100.51 | 101.00 | 102.26 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 62.53 + 58.14 – 34.03
= 86.64
The cash conversion cycle of Valmont Industries Inc has fluctuated over the past few quarters. The trend shows some variability but generally reflects the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
Looking at the data, we see that the cash conversion cycle reached a peak in March 2022 at 103.82 days and then decreased gradually until reaching a low point in December 2022 at 85.05 days. However, it started to increase again in the following quarters, with a slight uptick in the most recent quarter at 86.64 days.
Overall, the company's cash conversion cycle has shown some volatility, indicating fluctuations in inventory management, accounts receivable collection, and accounts payable turnover. A longer cash conversion cycle suggests that the company may be facing challenges in efficiently managing its working capital, potentially leading to a strain on liquidity and cash flow.
It would be important for Valmont Industries Inc to closely monitor and manage its cash conversion cycle to ensure optimal utilization of resources and improved financial performance in the long run.
Peer comparison
Dec 31, 2023