Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Apache Corp., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
The financial ratios and operational metrics over the observed periods reveal several trends and shifts in working capital management and operational efficiency.
- Inventory Turnover
- The inventory turnover ratio fluctuates moderately, generally declining from early 2012 through mid-2013, with a few recoveries in late 2013 and 2014. However, the overall trend from 2012 to mid-2016 indicates a slight decrease, suggesting slower inventory movement over time.
- Receivables Turnover
- The receivables turnover ratio shows variability but remains relatively stable between approximately 5 and 6.5. A peak in mid-2014 is followed by a gradual decline starting late 2014 through mid-2016, implying a slower collection of receivables in the later periods.
- Payables Turnover
- Payables turnover exhibits more pronounced fluctuations. Initially stable around 2.7 to 3.0 through 2012 and early 2013, it drops sharply in late 2013 before recovering and increasing substantially by mid-2015. This indicates longer payment periods followed by tighter payment cycles as the ratio increases.
- Working Capital Turnover
- This metric displays significant volatility with missing data early on. Notably high values appear sporadically, reaching peaks such as 122.28 and 28.43, but generally trend downward toward 2016. The wide fluctuations suggest inconsistent efficiency in utilizing working capital.
- Average Inventory Processing Period
- The average days to process inventory generally increase over the observed periods, moving from around 75 days in early 2012 to averages above 100 days by 2015 and 2016. This reflects lengthening inventory holding times.
- Average Receivable Collection Period
- This metric remains mostly stable, fluctuating between mid-50s to low-70s days. Notably, a gradual increase is visible from late 2014 forward, coinciding with the decline in receivables turnover ratio, indicative of longer times to collect receivables.
- Operating Cycle
- The operating cycle lengthens steadily over time, extending from approximately 140 days in early 2012 to over 170 days by 2016. This signals a growing time interval for the full cycle of production and receivable collection.
- Average Payables Payment Period
- There is considerable variation here, with periods of increase particularly in 2013 and 2014, followed by a notable reduction in mid-2015. In early 2016, the payment period stabilizes around 105 to 110 days, reflecting attempts to manage cash outflows more promptly.
- Cash Conversion Cycle
- The cash conversion cycle fluctuates widely, beginning with small positive values, then shifting into negative territory between late 2013 and late 2014, indicating that payables are being paid after receivables are collected and inventory is sold. However, from mid-2015 onward, the cash conversion cycle lengthens significantly, reaching over 60 days by mid-2016, suggesting a deterioration in cash flow efficiency.
In summary, the data reveals a gradual lengthening of the operational cycle driven by slower inventory turnover and increased collection periods for receivables. While payables payment periods have experienced considerable variability, their shortening in some later periods may reflect attempts to optimize supplier relationships or respond to credit terms. The notable extension of the cash conversion cycle in the last observed periods implies a potential strain on liquidity, highlighting areas for attention in working capital management.
Turnover Ratios
Average No. Days
Inventory Turnover
Apache Corp., inventory turnover calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cost of revenues | 411) | 430) | 504) | 508) | 516) | 537) | 687) | 719) | 679) | 667) | 697) | 902) | 909) | 845) | 858) | 887) | 776) | 750) | ||||||
| Inventories | 530) | 547) | 570) | 667) | 629) | 666) | 708) | 713) | 794) | 727) | 891) | 889) | 973) | 885) | 908) | 774) | 745) | 607) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Inventory turnover1 | 3.50 | 3.58 | 3.62 | 3.37 | 3.91 | 3.94 | 3.89 | 3.87 | 3.71 | 4.37 | 3.76 | 3.95 | 3.60 | 3.80 | 3.60 | 4.07 | 4.02 | 4.86 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Inventory turnover
= (Cost of revenuesQ2 2016
+ Cost of revenuesQ1 2016
+ Cost of revenuesQ4 2015
+ Cost of revenuesQ3 2015)
÷ Inventories
= (411 + 430 + 504 + 508)
÷ 530 = 3.50
2 Click competitor name to see calculations.
- Cost of Revenues
- The cost of revenues exhibited a general declining trend from March 2012 through June 2016. Starting at 750 million USD in the first quarter of 2012, costs increased gradually to peak near 909 million USD in the second quarter of 2013. After this peak, there was a noticeable downward trend, with costs decreasing steadily to reach 411 million USD by mid-2016. This reduction indicates improved cost control or decreased production volumes over the observed period.
- Inventories
- Inventory levels showed variability but generally trended downward over the analyzed quarters. Initially, inventories increased from 607 million USD in early 2012 to a high near 973 million USD by mid-2013. Following this peak, inventories declined, stabilizing somewhat but continuing a slow descent to 530 million USD in mid-2016. The fluctuations suggest adjustments in stock management and possibly changes in demand or supply chain efficiencies.
- Inventory Turnover Ratio
- The inventory turnover ratio indicated fluctuating efficiency in inventory management. Beginning at 4.86 times in the first quarter of 2012, the ratio declined generally through 2012, reaching a low near 3.6 by year-end. The ratio remained relatively stable with minor fluctuations around 3.6 to 4.0 through 2013 and 2014, signifying stable inventory movement relative to cost of revenues. However, from 2015 onwards, the turnover ratio showed a modest decline below 3.6, suggesting a slightly slower rate of inventory turnover despite the reductions in cost of revenues and inventory values.
- Overall Analysis
- The data indicate that while cost of revenues and inventory levels both peaked around mid-2013 and subsequently trended downward, the inventory turnover ratio reflects a complex relationship between inventory management and sales. The decline in inventory and cost of revenues suggests efforts to optimize operations or reduced demand, but the corresponding inventory turnover ratio's mild decline suggests that inventory is being converted to sales at a slightly slower pace in recent periods. This could reflect strategic stockpiling, market conditions, or operational adjustments affecting sales velocity.
Receivables Turnover
Apache Corp., receivables turnover calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Oil and gas production revenues | 1,386) | 1,087) | 1,221) | 1,572) | 1,952) | 1,638) | 2,926) | 3,468) | 3,708) | 3,647) | 3,728) | 4,409) | 4,119) | 4,146) | 4,393) | 4,141) | 3,956) | 4,457) | ||||||
| Receivables, net of allowance | 1,016) | 1,120) | 1,253) | 1,332) | 1,589) | 1,767) | 2,024) | 2,287) | 2,407) | 2,479) | 2,952) | 3,086) | 2,914) | 3,106) | 3,086) | 2,976) | 2,625) | 3,163) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Receivables turnover1 | 5.18 | 5.21 | 5.09 | 6.07 | 6.28 | 6.64 | 6.79 | 6.36 | 6.44 | 6.42 | 5.56 | 5.53 | 5.76 | 5.36 | 5.49 | 5.66 | 6.47 | 5.50 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Receivables turnover
= (Oil and gas production revenuesQ2 2016
+ Oil and gas production revenuesQ1 2016
+ Oil and gas production revenuesQ4 2015
+ Oil and gas production revenuesQ3 2015)
÷ Receivables, net of allowance
= (1,386 + 1,087 + 1,221 + 1,572)
÷ 1,016 = 5.18
2 Click competitor name to see calculations.
- Oil and Gas Production Revenues
- The revenues demonstrate notable fluctuations over the examined periods. Initially, revenues ranged from approximately 3956 to 4457 million USD with some quarterly volatility through 2012. The revenues peaked in late 2013 at around 4409 million USD, followed by a general declining trend throughout 2014 and more steeply into 2015 and 2016. By mid-2016, the revenues decreased considerably, reaching a low near 1087 million USD. This overall decline in revenue may indicate challenges in market conditions or production volumes during the latter periods.
- Receivables, Net of Allowance
- Receivables also illustrated a declining trend over the timeframe. Starting from over 3100 million USD in early 2012, receivables showed slight fluctuations but generally trended downward across the years, notably dropping during 2014 and continuing steadily down to approximately 1016 million USD by mid-2016. This decline suggests improved collection or potential decreases in credited sales, aligning with the reduction in revenues.
- Receivables Turnover Ratio
- The receivables turnover ratio experienced moderate variation, staying mostly between approximately 5.1 and 6.8 across the periods. Early periods showed higher turnover values in the range of 5.5 to 6.5, with some peaks near 6.79 during late 2014, indicating relatively efficient collection of receivables. However, a gradual decline to around 5.1–5.2 occurred by 2015 and 2016, potentially reflecting somewhat slower turnover or collection periods. Despite the downward trend, the ratio remains within a reasonable range for operational efficiency.
Payables Turnover
Apache Corp., payables turnover calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cost of revenues | 411) | 430) | 504) | 508) | 516) | 537) | 687) | 719) | 679) | 667) | 697) | 902) | 909) | 845) | 858) | 887) | 776) | 750) | ||||||
| Accounts payable | 544) | 571) | 618) | 659) | 710) | 1,010) | 1,210) | 1,316) | 1,491) | 1,438) | 1,616) | 1,345) | 1,346) | 1,226) | 1,092) | 1,137) | 1,061) | 1,059) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Payables turnover1 | 3.41 | 3.43 | 3.34 | 3.41 | 3.46 | 2.60 | 2.27 | 2.10 | 1.98 | 2.21 | 2.07 | 2.61 | 2.60 | 2.75 | 3.00 | 2.77 | 2.82 | 2.79 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Payables turnover
= (Cost of revenuesQ2 2016
+ Cost of revenuesQ1 2016
+ Cost of revenuesQ4 2015
+ Cost of revenuesQ3 2015)
÷ Accounts payable
= (411 + 430 + 504 + 508)
÷ 544 = 3.41
2 Click competitor name to see calculations.
The analysis of the financial data reveals several noteworthy trends in the cost of revenues, accounts payable, and payables turnover for the periods observed.
- Cost of Revenues
- The cost of revenues exhibited a generally downward trend from March 2012 through June 2016. The value began at $750 million in March 2012 and increased until peaked around the third quarter of 2012 at $887 million. Following this peak, there was a gradual decrease with some fluctuations, reaching $411 million by June 2016. This decline suggests a reduction in direct costs related to the company's goods or services over the period.
- Accounts Payable
- Accounts payable showed an initial increase from $1,059 million in March 2012 to a peak of $1,616 million in December 2013. After this peak, a consistent downtrend is observable, decreasing to $544 million by June 2016. The substantial reduction after 2013 reflects either improved payment terms, reduction in purchases on credit, or enhanced management of payables. The initial rise indicates growing short-term liabilities or increased purchasing volume in earlier years.
- Payables Turnover
- The payables turnover ratio demonstrates variability over the periods. Starting at 2.79 in March 2012, it remained relatively stable near this range until the end of 2013, where it dropped significantly to approximately 2.07 in December 2013. After this low point, the ratio began to recover steadily, rising to values above 3.4 by mid-2016. A lower ratio in late 2013 indicates slower payment to suppliers or longer credit terms, while the subsequent increase suggests more efficient payment practices or shorter credit terms utilized by the company moving forward.
In summary, over the observed timeframe, the data indicates a cost reduction in revenues, an initial accumulation followed by a sizable decrease in accounts payable, and a dynamic payables turnover ratio reflecting changes in payment efficiency and creditor management. The improvements in payable turnover in the later periods likely contributed to the reduction in accounts payable balances.
Working Capital Turnover
Apache Corp., working capital turnover calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current assets | 3,292) | 3,260) | 3,752) | 4,079) | 5,493) | 5,906) | 6,415) | 4,426) | 5,126) | 5,463) | 6,366) | 6,016) | 4,758) | 4,848) | 4,962) | 5,044) | 4,639) | 4,954) | ||||||
| Less: Current liabilities | 1,570) | 1,565) | 1,841) | 2,167) | 2,383) | 5,493) | 3,664) | 4,307) | 4,570) | 4,356) | 4,700) | 4,523) | 5,158) | 5,562) | 5,536) | 5,390) | 5,121) | 4,698) | ||||||
| Working capital | 1,722) | 1,695) | 1,911) | 1,912) | 3,110) | 413) | 2,751) | 119) | 556) | 1,107) | 1,666) | 1,493) | (400) | (714) | (574) | (346) | (482) | 256) | ||||||
| Oil and gas production revenues | 1,386) | 1,087) | 1,221) | 1,572) | 1,952) | 1,638) | 2,926) | 3,468) | 3,708) | 3,647) | 3,728) | 4,409) | 4,119) | 4,146) | 4,393) | 4,141) | 3,956) | 4,457) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Working capital turnover1 | 3.06 | 3.44 | 3.34 | 4.23 | 3.21 | 28.43 | 5.00 | 122.28 | 27.86 | 14.37 | 9.85 | 11.43 | — | — | — | — | — | 67.93 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Working capital turnover
= (Oil and gas production revenuesQ2 2016
+ Oil and gas production revenuesQ1 2016
+ Oil and gas production revenuesQ4 2015
+ Oil and gas production revenuesQ3 2015)
÷ Working capital
= (1,386 + 1,087 + 1,221 + 1,572)
÷ 1,722 = 3.06
2 Click competitor name to see calculations.
The analysis of the quarterly financial data over the given periods reveals several notable trends in the company's working capital, oil and gas production revenues, and working capital turnover ratios.
- Working Capital
- The working capital exhibited significant fluctuations throughout the observed periods. Initially positive at 256 million USD in the first quarter of 2012, it turned negative in subsequent quarters, reaching a low of -714 million USD by the first quarter of 2013. A remarkable turnaround occurred in the third quarter of 2013 when working capital surged to 1,493 million USD, continuing to increase and peaking at 3,110 million USD in the third quarter of 2015. From this peak, working capital gradually declined but remained positive, stabilizing around the 1,695 to 1,722 million USD range by the middle of 2016.
- Oil and Gas Production Revenues
- Revenues from oil and gas production demonstrated a general downward trend over the periods analyzed. Starting at 4,457 million USD in the first quarter of 2012, revenues showed some quarterly variability but largely declined overall, falling to less than half that initial figure by mid-2015, with a low point of approximately 1,221 million USD recorded in the first quarter of 2016. A minor uptick occurred by mid-2016 to around 1,386 million USD, yet this was substantially lower than the early years.
- Working Capital Turnover Ratio
- The working capital turnover ratio displayed a high degree of volatility. The ratio was exceptionally high at 67.93 in the first quarter of 2012 but data for several subsequent quarters is not provided. When available again in the third quarter of 2013, the ratio had decreased significantly to 11.43 and continued a gradual decline until the second quarter of 2014. A dramatic spike to 122.28 occurred in the third quarter of 2014, followed by a steep decline and subsequent fluctuations in the range of 3.06 to 28.43 through mid-2016. These fluctuations indicate irregular efficiency in using working capital to generate revenues over this time frame.
Overall, the data suggests that while the company managed to improve and maintain positive working capital after a period of deficits, the decline in oil and gas production revenues points to challenges in sustaining revenue performance. The erratic nature of the working capital turnover ratio further indicates variability in operational efficiency and capital utilization, warranting close attention to working capital management practices.
Average Inventory Processing Period
Apache Corp., average inventory processing period calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Inventory turnover | 3.50 | 3.58 | 3.62 | 3.37 | 3.91 | 3.94 | 3.89 | 3.87 | 3.71 | 4.37 | 3.76 | 3.95 | 3.60 | 3.80 | 3.60 | 4.07 | 4.02 | 4.86 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average inventory processing period1 | 104 | 102 | 101 | 108 | 93 | 93 | 94 | 94 | 98 | 84 | 97 | 92 | 101 | 96 | 101 | 90 | 91 | 75 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.50 = 104
2 Click competitor name to see calculations.
The analysis of the quarterly financial ratios reveals notable trends in inventory management over the examined periods. Two key metrics, inventory turnover and average inventory processing period, illustrate the efficiency with which inventory is managed and sold.
- Inventory Turnover
- The inventory turnover ratio demonstrates a fluctuating but generally declining trend from the beginning to the latter part of the period. Starting at 4.86 in the first quarter of 2012, the ratio decreased to around 3.5 by the middle of 2016. This decline suggests a gradual reduction in the frequency with which inventory is converted to sales.
- Periodic peaks and troughs indicate some recovery or operational adjustments, such as a notable rise to 4.37 in early 2014. However, overall, the ratio remained below the initial levels, reflecting a possible slowdown in inventory movement or increased stock levels relative to sales.
- Average Inventory Processing Period
- Complementary to the turnover ratio, the average inventory processing period highlights the duration inventory remains on hand. This metric increased over time, starting at 75 days in the first quarter of 2012 and reaching over 100 days in several quarters post-2015, peaking at 108 days in late 2015.
- The lengthening processing period indicates that inventory is held longer, which could imply slower sales or increased stockpiling. The trend aligns inversely with the declining turnover ratio, reinforcing the interpretation of diminishing inventory turnover efficiency.
- Overall Insights
- The inverse relationship between inventory turnover and processing periods is consistent throughout the timeframe analyzed. The company's inventory management efficiency appears to have deteriorated, as evidenced by the slower turnover rate and increased holding times.
- These patterns may reflect broader operational challenges, changes in demand, supply chain factors, or strategic stock decisions. The decline in turnover and extended inventory days could potentially impact liquidity and increase carrying costs.
Average Receivable Collection Period
Apache Corp., average receivable collection period calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Receivables turnover | 5.18 | 5.21 | 5.09 | 6.07 | 6.28 | 6.64 | 6.79 | 6.36 | 6.44 | 6.42 | 5.56 | 5.53 | 5.76 | 5.36 | 5.49 | 5.66 | 6.47 | 5.50 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average receivable collection period1 | 70 | 70 | 72 | 60 | 58 | 55 | 54 | 57 | 57 | 57 | 66 | 66 | 63 | 68 | 66 | 64 | 56 | 66 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.18 = 70
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibited fluctuations over the observed periods. Starting at 5.5 in the first quarter of 2012, it increased to a peak of 6.79 by the end of 2014, indicating improved efficiency in collecting receivables during that span. However, from early 2015 onward, the ratio showed a declining trend, falling to around 5.18 by mid-2016, suggesting a gradual reduction in collection efficiency.
- Average Receivable Collection Period
- The average collection period, measured in days, moved inversely to the receivables turnover, as would be expected. It started at 66 days in early 2012, decreased to 54 days by the end of 2014, which aligns with the peak turnover ratio, indicating faster collections. From 2015 to mid-2016, the collection period increased again, reaching around 70 days, reflecting slower receivables collection during this latter period.
- Overall Trend and Insights
- There is a clear inverse relationship between the receivables turnover ratio and the average collection period throughout the timeframe. The data shows improved receivables management and faster collections through approximately 2012 to 2014, followed by a weakening in performance from 2015 onwards. This decline may warrant further investigation into credit policies, customer payment behavior, or external economic factors affecting collections during this latter period.
Operating Cycle
Apache Corp., operating cycle calculation (quarterly data)
No. days
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Average inventory processing period | 104 | 102 | 101 | 108 | 93 | 93 | 94 | 94 | 98 | 84 | 97 | 92 | 101 | 96 | 101 | 90 | 91 | 75 | ||||||
| Average receivable collection period | 70 | 70 | 72 | 60 | 58 | 55 | 54 | 57 | 57 | 57 | 66 | 66 | 63 | 68 | 66 | 64 | 56 | 66 | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Operating cycle1 | 174 | 172 | 173 | 168 | 151 | 148 | 148 | 151 | 155 | 141 | 163 | 158 | 164 | 164 | 167 | 154 | 147 | 141 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Operating Cycle, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 104 + 70 = 174
2 Click competitor name to see calculations.
The analysis of the financial data reveals several observable trends in the company’s operational efficiency over the examined periods.
- Average Inventory Processing Period
- The average inventory processing period shows variability across the quarters. Initially, it increases from 75 days to above 100 days by the end of 2012, indicating slower inventory turnover. After some fluctuations between 84 and 98 days over 2013 and 2014, there is a noticeable uptick starting in 2015, reaching a peak of 108 days in the third quarter of that year. The period ends with slightly lower but still elevated values above 100 days in early 2016. This overall trend suggests a general lengthening in the time inventory remains on hand, which may impact liquidity and working capital management.
- Average Receivable Collection Period
- The average receivable collection period exhibits a different pattern. It decreases from 66 days at the start of the observed timeframe to a low in the mid-50s around late 2014 and early 2015. However, from mid-2015 onward, there is a gradual increase, rising to approximately 70 days by early 2016. This increasing trend in receivables collection duration could indicate more credit risk or challenges in collecting payments promptly during the later periods.
- Operating Cycle
- The operating cycle, which combines both inventory processing and receivables collection periods, mirrors these changes. It reaches a high of 167 days at the end of 2012, declines to a low around 141 days in early 2014, and then rises steadily to a peak of 174 days by the first quarter of 2016. This extended operating cycle highlights an overall deceleration in the company's cash conversion efficiency, reflecting the combined effects of lengthening inventory turnover and collection times.
In summary, the financial data illustrate a trend of increasing operational delays, with inventory and receivables periods extending over the studied years. This indicates potential working capital challenges that may require management attention to optimize inventory management and improve collection processes to enhance liquidity and operational efficiency.
Average Payables Payment Period
Apache Corp., average payables payment period calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Payables turnover | 3.41 | 3.43 | 3.34 | 3.41 | 3.46 | 2.60 | 2.27 | 2.10 | 1.98 | 2.21 | 2.07 | 2.61 | 2.60 | 2.75 | 3.00 | 2.77 | 2.82 | 2.79 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average payables payment period1 | 107 | 106 | 109 | 107 | 105 | 141 | 160 | 174 | 185 | 165 | 176 | 140 | 140 | 133 | 122 | 132 | 129 | 131 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 3.41 = 107
2 Click competitor name to see calculations.
The analysis of the quarterly financial ratios related to payables reveals notable trends over the observed period.
- Payables Turnover
- The payables turnover ratio demonstrates fluctuations with an overall increasing trend toward the end of the period. Initially, the ratio fluctuates around values close to 2.75-3.0 from March 2012 to December 2012. Following that, there is a notable decline in turnover during 2013, reaching lows around 2.07 in December 2013. Subsequently, the ratio begins a recovery phase throughout 2014 and into 2015, with a marked increase in mid-2015 peaking around 3.46 in June 2015. From mid-2015 through mid-2016, the turnover ratio remains relatively stable at elevated levels, close to 3.4. These dynamics suggest a varying pace in the company's efficiency in settling its payables, with improvements evident in the latter years compared to earlier periods.
- Average Payables Payment Period
- The average payables payment period, expressed in days, moves inversely to the payables turnover ratio as expected. Early in the timeline, from 2012 through early 2013, the payment period is relatively consistent, ranging between approximately 122 to 140 days. However, there is a pronounced increase toward the end of 2013, peaking around 176 days, indicating a slower rate of payment to suppliers during that quarter. Following this peak, the period contracts steadily through 2014, moving down from about 185 days in mid-2014 to near 160 days by year-end. Continuing into 2015, a sharper decrease occurs, with the payment period dropping to approximately 105-109 days by the end of 2015 and maintaining this shorter payment duration into mid-2016. This trend points to an enhanced liquidity or improved payment practices in recent periods, allowing the company to reduce the time taken to settle payables.
In summary, the company experienced a period of extended payment duration and lower payables turnover around 2013, suggesting a slower payment cycle or potential liquidity challenges. However, from 2014 onward, the data indicate a positive shift with improved turnover ratios and reduced payment periods, reflecting increased efficiency and potentially stronger financial management concerning accounts payable activities.
Cash Conversion Cycle
Apache Corp., cash conversion cycle calculation (quarterly data)
No. days
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Average inventory processing period | 104 | 102 | 101 | 108 | 93 | 93 | 94 | 94 | 98 | 84 | 97 | 92 | 101 | 96 | 101 | 90 | 91 | 75 | ||||||
| Average receivable collection period | 70 | 70 | 72 | 60 | 58 | 55 | 54 | 57 | 57 | 57 | 66 | 66 | 63 | 68 | 66 | 64 | 56 | 66 | ||||||
| Average payables payment period | 107 | 106 | 109 | 107 | 105 | 141 | 160 | 174 | 185 | 165 | 176 | 140 | 140 | 133 | 122 | 132 | 129 | 131 | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Cash conversion cycle1 | 67 | 66 | 64 | 61 | 46 | 7 | -12 | -23 | -30 | -24 | -13 | 18 | 24 | 31 | 45 | 22 | 18 | 10 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Cash Conversion Cycle, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 104 + 70 – 107 = 67
2 Click competitor name to see calculations.
- Inventory Processing Period
- The average inventory processing period demonstrates some variability over the analyzed timeframe. Initially, it rose from 75 days in March 2012 to a peak of 101 days by December 2012. This was followed by a slight decline and oscillation around the mid-90s days through 2013 and 2014. However, from 2014 onwards, there was a tendency for the inventory period to increase again, reaching 108 days in September 2015 and then maintaining a level slightly above 100 days in the first half of 2016. This suggests a general lengthening of inventory turnover time, potentially indicating slower inventory movement or stock accumulation.
- Receivable Collection Period
- The receivable collection period displayed a decreasing trend initially, falling from 66 days in March 2012 to a low of 54 days in December 2014. Thereafter, this metric showed an upward trend, increasing steadily to 72 days in June 2016. This reversal suggests that the company initially improved its efficiency in collecting receivables, but this efficiency waned in more recent quarters, resulting in longer collection cycles.
- Payables Payment Period
- The payables payment period remained relatively stable but lengthy throughout the time span, fluctuating mostly between approximately 130 and 185 days. There was a noticeable increase from around 131 days in early 2012 to a peak near 185 days in mid-2014, indicating extended payment terms or delays in disbursing payables. However, a significant reduction occurred in 2015, dropping to near 105-110 days, which then remained fairly steady into mid-2016. This reduction points to potential changes in payment policies or supplier negotiations affecting the timing of payments.
- Cash Conversion Cycle
- The cash conversion cycle (CCC) exhibited considerable fluctuations. In early 2012, the CCC was positive but relatively low, starting at 10 days and rising to as high as 45 days by December 2012. Subsequently, the cycle decreased markedly, turning negative from December 2013 through December 2014, reaching a trough of -30 days in June 2014. This negative CCC implies that payables were being managed more efficiently relative to inventory and receivables, effectively financing operations through extended payment terms. However, from early 2015 onward, the CCC increased sharply, returning to positive territory and reaching a high of 67 days by mid-2016. This pattern reveals a shift towards longer net operating cycles and potentially higher working capital requirements.