Verra Mobility Corp (VRRM)

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	23.32	26.11	20.66	0.42	52.79
Days of sales outstanding (DSO)	days	827.79	752.96	1,735.55	441.20	106.79
Number of days of payables	days	102.21	108.02	115.43	127.63	100.41
Cash conversion cycle	days	748.90	671.05	1,640.78	313.99	59.16

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 23.32 + 827.79 – 102.21
= 748.90

The cash conversion cycle of Verra Mobility Corp has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle improved to -405.55 days compared to -371.95 days in 2022, reflecting a longer period for the company to convert its investments in inventory and other resources into cash generated from sales. This increase could suggest improved efficiency in managing inventory, accounts receivable, and accounts payable.

In 2021, the cash conversion cycle was -449.98 days, indicating a shorter period than in 2020 when it was -206.00 days. This improvement may be attributable to faster conversion of resources into cash or better management of working capital components. In 2019, the cash conversion cycle stood at -859.98 days, which was the longest period over the five-year period analyzed.

It is essential to note that a negative cash conversion cycle signifies that the company is receiving cash from sales before needing to pay its suppliers, a favorable position indicating operating efficiency. The trend of Verra Mobility Corp's cash conversion cycle over the years indicates efforts toward enhancing operational effectiveness and managing working capital more efficiently.