Valvoline Inc (VVV)
Cash conversion cycle
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 10.72 | 11.50 | 11.08 | 9.57 | 10.40 | — | 115.68 | 19.44 | 10.06 | 37.29 | 35.46 | 36.42 | 4.14 | 51.99 | 52.84 | 55.69 | 53.10 | 52.22 | 53.95 | 48.73 |
| Days of sales outstanding (DSO) | days | 19.01 | 22.65 | 26.22 | 20.57 | 20.59 | 18.90 | 11.32 | 8.27 | 7.95 | 71.02 | 72.58 | 73.10 | 9.76 | 63.92 | 64.84 | 65.40 | 67.14 | 62.01 | 52.92 | 59.09 |
| Number of days of payables | days | 31.72 | 30.82 | 35.09 | 23.46 | 37.08 | — | 296.28 | 29.04 | 15.39 | 32.30 | 30.58 | 30.07 | 5.84 | 45.47 | 43.63 | 41.31 | 50.43 | 49.18 | 48.01 | 38.43 |
| Cash conversion cycle | days | -1.98 | 3.34 | 2.21 | 6.69 | -6.08 | 18.90 | -169.28 | -1.33 | 2.61 | 76.02 | 77.46 | 79.45 | 8.07 | 70.45 | 74.05 | 79.78 | 69.81 | 65.05 | 58.85 | 69.39 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 10.72 + 19.01 – 31.72
= -1.98
The cash conversion cycle of Valvoline Inc fluctuated significantly over the past few quarters.
In the most recent quarter, ending September 30, 2024, Valvoline Inc's cash conversion cycle was -1.98 days, indicating that the company converted its inventory and accounts receivable into cash before having to pay its accounts payable. This negative cycle suggests efficient management of working capital.
However, in the previous quarter, ending June 30, 2024, the cash conversion cycle increased to 3.34 days, indicating a slight delay in converting inventory and receivables into cash compared to the most recent quarter.
Looking back to March 31, 2024, the cash conversion cycle was 2.21 days, showing an improvement from the previous quarter, indicating that Valvoline Inc was able to manage its working capital more efficiently during that period.
In contrast, the cash conversion cycle for the quarter ending December 31, 2023, was 6.69 days, suggesting a longer time to convert working capital into cash. This increase could be due to various factors such as increased inventory levels or a slowdown in collecting receivables.
It is notable that in the quarter ending March 31, 2023, the cash conversion cycle was significantly negative at -169.28 days, indicating potentially inefficient management of working capital where the company paid its accounts payable much before collecting cash from customers.
Overall, fluctuations in the cash conversion cycle of Valvoline Inc demonstrate the company's ability to efficiently manage its working capital and the importance of monitoring this metric for indications of operational efficiency and liquidity management.
Peer comparison
Sep 30, 2024