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)
Hess Corp., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
The financial data over multiple quarters reveals distinct patterns in the operational efficiency and liquidity management of the company. Key metrics including turnover ratios and cycle periods illustrate variations in how assets and liabilities have been managed over time.
- Inventory Turnover
- The inventory turnover ratio shows fluctuations with a general trend toward higher efficiency in recent quarters. After a decline during 2020, the ratio increased significantly, peaking in late 2022. This suggests improved inventory management, with faster movement of stock in the latter periods. Correspondingly, the average inventory processing period decreased from over 30 days in 2020 to around 7-12 days in 2023, confirming quicker inventory turnover.
- Receivables Turnover
- Receivables turnover ratios show considerable variability. After an increase in early 2020, the ratio dipped in late 2020 and early 2021, indicating slower collection. In late 2021 through mid-2023, the ratio improved again, implying quicker collection of receivables during that interval. The average receivable collection period aligns with this, declining from as high as 71 days in early 2021 to around 35-39 days in mid-2023, demonstrating more efficient receivables management in that timeframe.
- Payables Turnover
- The payables turnover ratio generally increased from 2019 to 2021, peaking in late 2021, which indicates faster payments to suppliers. However, there was a noticeable decline into 2023, suggesting a lengthening of payment periods. This trend corresponds with the average payables payment period, which decreased to as low as 9 days in late 2022 before rising again to around 15 days in 2023, reflecting more extended payment terms recently.
- Working Capital Turnover
- The working capital turnover ratio exhibits improvement over the periods, particularly from 2021 onward. It rose notably from single digits to surpass 11 in the most recent quarter. This suggests enhanced efficiency in utilizing working capital to generate sales.
- Operating Cycle
- The operating cycle, measuring the time from inventory acquisition to cash collection, showed elongation in 2020, peaking at 97 days, but thereafter shortened significantly, reaching as low as 44 days in mid-2023. This reduction implies more efficient operations and cash flow management.
- Cash Conversion Cycle
- The cash conversion cycle trends mirror improvements in overall operational efficiency after mid-2020. Following a peak in 2020 at 81 days, the cycle decreased to about 32-35 days in 2023, indicating faster conversion of investments in inventory and receivables into cash, thus enhancing liquidity.
Overall, the company's operational and liquidity metrics indicate a period of disruption or inefficiency around 2020, likely linked to external factors, followed by progressive recovery and improvements in inventory management, receivables collection, and working capital utilization. However, recent trends suggest a cautious extension in payables payment periods, which may reflect strategic cash management decisions.
Turnover Ratios
Average No. Days
Inventory Turnover
Hess Corp., inventory turnover calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Sales and other operating revenues | 2,800) | 2,289) | 2,411) | 2,934) | 3,122) | 2,955) | 2,313) | 2,237) | 1,759) | 1,579) | 1,898) | 1,321) | 1,159) | 833) | 1,354) | 1,683) | 1,580) | 1,660) | 1,572) | ||||||
| Inventories | 333) | 278) | 229) | 217) | 278) | 317) | 243) | 223) | 262) | 241) | 219) | 378) | 422) | 360) | 230) | 261) | 289) | 278) | 274) | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Inventory turnover1 | 31.33 | 38.69 | 49.88 | 52.18 | 38.23 | 29.22 | 32.46 | 33.51 | 25.03 | 24.72 | 23.79 | 12.35 | 11.92 | 15.14 | 27.29 | 24.89 | 22.36 | 24.01 | 23.90 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 21.48 | 23.28 | 25.16 | 28.58 | 25.22 | 26.71 | 27.10 | 24.68 | 21.96 | 18.60 | 17.05 | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 45.23 | 53.99 | 60.05 | 64.39 | 61.22 | 52.97 | 45.80 | 37.94 | 34.71 | 25.71 | 20.45 | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 14.16 | 15.02 | 16.69 | 16.32 | 16.05 | 14.93 | 13.84 | 14.73 | 12.30 | 11.14 | 9.86 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Inventory turnover
= (Sales and other operating revenuesQ3 2023
+ Sales and other operating revenuesQ2 2023
+ Sales and other operating revenuesQ1 2023
+ Sales and other operating revenuesQ4 2022)
÷ Inventories
= (2,800 + 2,289 + 2,411 + 2,934)
÷ 333 = 31.33
2 Click competitor name to see calculations.
- Sales and Other Operating Revenues
- Sales and other operating revenues exhibit noticeable fluctuations across the analyzed periods. From the first quarter of 2019 through the end of 2019, there is a generally stable upward trend, with revenues rising from 1,572 million USD to 1,683 million USD. However, a significant decline occurs beginning in the first quarter of 2020, reaching a low point of 833 million USD in the second quarter of 2020, likely reflecting external adverse conditions during that time. Recovery follows in the subsequent quarters of 2020 and throughout 2021, with revenues steadily increasing and surpassing pre-2020 levels by late 2021. The positive momentum continues strongly into 2022, peaking at over 3,100 million USD in the third quarter before slightly retreating in early 2023 yet maintaining elevated levels compared to prior years.
- Inventories
- Inventory levels demonstrate variable behavior across quarters. Initially stable around the 260-280 million USD range in early 2019, there is a marked increase through the middle of 2020, peaking at 422 million USD in the third quarter. Following this peak, inventories decline throughout late 2020 and most of 2021, reaching lower levels near 220 million USD. Starting from 2022, inventory amounts fluctuate moderately between approximately 220 million USD and 330 million USD, with no consistent upward or downward trend. The general pattern suggests a responsive adjustment of inventory holdings in relation to external demand and operational factors.
- Inventory Turnover Ratio
- The inventory turnover ratio shows substantial variability and tends to inversely relate to inventory levels. Early 2019 to year-end 2019 maintains strong turnover between approximately 22 and 25 times, indicating efficient inventory management. The ratio drops sharply in 2020, reaching a low of approximately 12 times during the third quarter, coinciding with the highest inventory levels and reduced revenues. This low turnover indicates slower movement of inventory during this period. A significant recovery occurs starting late 2020 into 2021 and beyond, with the ratio rising sharply to double-digit and then exceeding 30 times by late 2021 and into 2022. The peak turnover above 50 times observed in late 2022 reflects exceptionally rapid inventory movement, consistent with reduced inventory quantities during that period. Despite a gradual decline in turnover in 2023, levels remain elevated relative to the initial periods analyzed.
- Overall Insights
- The company's financial data reveals a strong sensitivity to external conditions, as seen with the sharp revenue and inventory disruptions occurring in 2020. Post-2020 recovery is notable, with revenues exceeding previous peaks and inventory management appearing more efficient, as reflected by the heightened turnover ratios. The inverse relationship between inventory levels and turnover ratio suggests deliberate inventory control adjustments corresponding to sales demand. The elevated inventory turnover in recent periods may indicate improvements in operational efficiency or shifts in sales dynamics. Continued monitoring of these trends would be advisable to assess sustainability of revenue growth and inventory management strategies.
Receivables Turnover
Hess Corp., receivables turnover calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Sales and other operating revenues | 2,800) | 2,289) | 2,411) | 2,934) | 3,122) | 2,955) | 2,313) | 2,237) | 1,759) | 1,579) | 1,898) | 1,321) | 1,159) | 833) | 1,354) | 1,683) | 1,580) | 1,660) | 1,572) | ||||||
| Accounts receivable | 1,460) | 1,019) | 1,207) | 1,162) | 1,375) | 1,406) | 1,524) | 1,211) | 1,094) | 1,002) | 1,011) | 860) | 699) | 596) | 794) | 1,170) | 1,122) | 1,060) | 1,116) | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Receivables turnover1 | 7.15 | 10.56 | 9.46 | 9.75 | 7.73 | 6.59 | 5.18 | 6.17 | 5.99 | 5.95 | 5.15 | 5.43 | 7.19 | 9.14 | 7.91 | 5.55 | 5.76 | 6.30 | 5.87 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 9.21 | 11.10 | 12.21 | 11.52 | 10.11 | 7.67 | 7.60 | 8.45 | 8.12 | 7.39 | 6.79 | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 10.57 | 14.73 | 14.26 | 11.07 | 10.21 | 8.02 | 6.82 | 6.87 | 6.62 | 6.47 | 5.01 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Receivables turnover
= (Sales and other operating revenuesQ3 2023
+ Sales and other operating revenuesQ2 2023
+ Sales and other operating revenuesQ1 2023
+ Sales and other operating revenuesQ4 2022)
÷ Accounts receivable
= (2,800 + 2,289 + 2,411 + 2,934)
÷ 1,460 = 7.15
2 Click competitor name to see calculations.
The financial data reveals several key trends and fluctuations over the reported periods. There is notable variability in sales and operating revenues, accounts receivable, and receivables turnover ratios, indicating changes in business volume and credit management efficiency.
- Sales and Other Operating Revenues
- Revenues exhibit a fluctuating pattern with three distinct phases. Initially, from early 2019 to the end of 2019, revenues were relatively stable, ranging between approximately $1.57 billion and $1.68 billion. In 2020, there was a marked decline reaching a low of $833 million in the second quarter, likely reflecting adverse external conditions impacting operational performance.
- Starting in the first quarter of 2021, revenues recovered strongly, with a sharp increase to over $2.2 billion by the end of 2021. This upward momentum continued into 2022, peaking at approximately $3.1 billion in the third quarter, before experiencing some volatility with a slight decline toward the last reported quarter in 2023.
- Accounts Receivable
- The accounts receivable balances follow a broadly similar pattern to revenues but with some lag and variability. Beginning 2019, receivables remained around $1.1 billion but decreased significantly during 2020, reaching around $596 million by mid-year. This dip corresponds with the reduced revenue levels observed in the same period.
- Subsequently, accounts receivable increased steadily beginning in 2021, reaching a maximum near $1.5 billion in early 2022. Afterward, values declined somewhat into 2023, fluctuating around the $1.0 billion mark but rose again later in 2023, suggesting potentially changing collection dynamics or credit policies.
- Receivables Turnover Ratio
- This ratio, which indicates the efficiency of credit and collections management, displayed marked fluctuations. The turnover ratio was relatively moderate and stable in 2019, fluctuating generally between 5.5 and 6.3.
- In 2020, despite the decline in revenues, the turnover improved, peaking at over 9.1 indicating faster collections or tighter credit policies likely implemented in response to uncertain market conditions. The ratio then decreased to around 5.4 by the end of 2020 as operations began stabilizing again.
- Throughout 2021 and most of 2022, the turnover ratio remained in the range of 5.1 to 7.7, suggesting consistent but moderate collection efficiency. Toward late 2022 and into 2023, the ratio rose sharply, reaching nearly 9.8 and above, signifying an improvement in receivables management efficiency during periods of increasing revenue. However, the most recent quarter shows a decline to around 7.15.
Overall, the data reflects a business affected by significant external challenges in 2020, evidenced by decreased revenues and receivables. Recovery began in 2021 with increasing revenues and receivables balances, accompanied by improvements in receivables turnover, indicating better collection performance. The recent quarters highlight continuing variability with generally elevated revenues and relatively high turnover ratios, suggesting ongoing adjustments in operational and credit management practices.
Payables Turnover
Hess Corp., payables turnover calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Sales and other operating revenues | 2,800) | 2,289) | 2,411) | 2,934) | 3,122) | 2,955) | 2,313) | 2,237) | 1,759) | 1,579) | 1,898) | 1,321) | 1,159) | 833) | 1,354) | 1,683) | 1,580) | 1,660) | 1,572) | ||||||
| Accounts payable | 426) | 350) | 344) | 285) | 321) | 359) | 312) | 220) | 210) | 178) | 172) | 200) | 200) | 307) | 431) | 411) | 396) | 353) | 399) | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Payables turnover1 | 24.49 | 30.73 | 33.20 | 39.73 | 33.11 | 25.81 | 25.28 | 33.97 | 31.22 | 33.47 | 30.30 | 23.34 | 25.15 | 17.75 | 14.56 | 15.80 | 16.32 | 18.91 | 16.41 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Payables Turnover, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 9.35 | 11.48 | 12.94 | 12.44 | 10.46 | 8.28 | 8.78 | 9.46 | 8.79 | 7.88 | 7.45 | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 11.66 | 14.43 | 14.81 | 12.74 | 11.97 | 11.13 | 10.98 | 9.12 | 8.76 | 8.10 | 5.91 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Payables turnover
= (Sales and other operating revenuesQ3 2023
+ Sales and other operating revenuesQ2 2023
+ Sales and other operating revenuesQ1 2023
+ Sales and other operating revenuesQ4 2022)
÷ Accounts payable
= (2,800 + 2,289 + 2,411 + 2,934)
÷ 426 = 24.49
2 Click competitor name to see calculations.
- Sales and Other Operating Revenues
- The sales and other operating revenues exhibited notable volatility over the observed periods. Initially, values fluctuated between approximately 1,572 and 1,683 million US dollars in 2019, peaking in the fourth quarter. A significant decline occurred starting in early 2020, reaching a low point in the second quarter at 833 million US dollars, likely influenced by external economic factors. Following this downturn, revenues demonstrated a recovery trend throughout late 2020 and into 2021, with quarterly figures surpassing previous highs and peaking again in the fourth quarter of 2021 at 2,237 million US dollars. In 2022, revenues continued to increase, reaching over 3,000 million US dollars in the third quarter, before a slight decrease toward the end of the year. The first three quarters of 2023 show moderate fluctuations but generally sustain strong revenue levels around the 2,300 to 2,800 million US dollars range.
- Accounts Payable
- Accounts payable displayed a general downward trend in 2019 and 2020, decreasing from 399 million US dollars in the first quarter of 2019 to around 200 million US dollars by the end of 2020. This was followed by a gradual upward trend, rising to 312 million by the first quarter of 2022. The value then fluctuated moderately over subsequent quarters, reaching a peak of 426 million US dollars in the third quarter of 2023. This pattern indicates a period of leaner short-term liabilities during 2020, with a return to higher payable balances in later periods potentially reflecting increased operational activities or shifts in payment policies.
- Payables Turnover Ratio
- The payables turnover ratio exhibited significant variability across the periods. Initially, the ratio hovered around mid-teens to low twenties from 2019 through mid-2020, indicating a moderate rate of payments to suppliers. Notably, it increased sharply in late 2020, reaching above 30 times per year and peaking at nearly 40 times in the fourth quarter of 2022. This elevated turnover suggests a faster rate of payment relative to payables, which may reflect improved liquidity management or changes in supplier terms. However, the ratio showed signs of decreasing in the most recent quarters of 2023, dropping to around 24.5 times, implying a relative slowing in payment velocity compared to prior peaks.
- Overall Observations
- Sales revenues show a recovery from a sharp dip in early 2020 back to strong growth through 2021 and 2022, maintaining robust levels into 2023. Accounts payable trends complement this by indicating an initial reduction in liabilities during the downturn in 2020, followed by an increase correlating with strengthening operations. The payables turnover ratio's rise and subsequent moderation indicate evolving payment strategies and liquidity positions over time, highlighting a balance between operational growth and supplier payment management.
Working Capital Turnover
Hess Corp., working capital turnover calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Current assets | 3,916) | 3,704) | 3,799) | 3,931) | 4,123) | 3,969) | 3,266) | 4,346) | 3,892) | 3,969) | 3,522) | 3,081) | 3,136) | 3,115) | 4,270) | 3,156) | 3,398) | 3,684) | 3,834) | ||||||
| Less: Current liabilities | 2,996) | 2,403) | 2,308) | 2,396) | 2,312) | 2,355) | 2,303) | 3,064) | 2,749) | 2,527) | 1,690) | 1,623) | 1,426) | 1,564) | 1,947) | 2,510) | 2,344) | 2,332) | 2,271) | ||||||
| Working capital | 920) | 1,301) | 1,491) | 1,535) | 1,811) | 1,614) | 963) | 1,282) | 1,143) | 1,442) | 1,832) | 1,458) | 1,710) | 1,551) | 2,323) | 646) | 1,054) | 1,352) | 1,563) | ||||||
| Sales and other operating revenues | 2,800) | 2,289) | 2,411) | 2,934) | 3,122) | 2,955) | 2,313) | 2,237) | 1,759) | 1,579) | 1,898) | 1,321) | 1,159) | 833) | 1,354) | 1,683) | 1,580) | 1,660) | 1,572) | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Working capital turnover1 | 11.34 | 8.27 | 7.66 | 7.38 | 5.87 | 5.74 | 8.19 | 5.83 | 5.74 | 4.13 | 2.84 | 3.20 | 2.94 | 3.51 | 2.70 | 10.05 | 6.13 | 4.94 | 4.19 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 23.91 | 16.54 | 15.89 | 14.61 | 15.53 | 17.08 | 13.09 | 22.40 | 19.37 | 24.04 | 32.46 | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 8.76 | 16.88 | 16.56 | 13.30 | 11.63 | 9.84 | 9.02 | 11.37 | 3.72 | 3.24 | 3.02 | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 11.56 | 12.16 | 12.91 | 13.95 | 15.33 | 26.98 | 59.06 | 110.19 | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Working capital turnover
= (Sales and other operating revenuesQ3 2023
+ Sales and other operating revenuesQ2 2023
+ Sales and other operating revenuesQ1 2023
+ Sales and other operating revenuesQ4 2022)
÷ Working capital
= (2,800 + 2,289 + 2,411 + 2,934)
÷ 920 = 11.34
2 Click competitor name to see calculations.
- Working Capital
- The working capital figures exhibit fluctuations across the reported quarters. Initially, there is a decline from 1563 million USD in Q1 2019 to 646 million USD in Q4 2019. This is followed by a recovery phase through 2020, with values stabilizing around 1458 million USD by the end of that year. During 2021, working capital shows a slight decrease followed by moderate variability, ending the year at 1282 million USD. In 2022, the working capital increases notably, peaking at 1811 million USD in Q3, but then slightly declines toward early 2023, reaching 920 million USD by Q3 2023. Overall, the trend suggests periods of tightening liquidity interspersed with recovery phases.
- Sales and Other Operating Revenues
- Sales demonstrate a general upward trajectory over the full period, with some volatility. The first notable dip occurs in 2020, especially in Q2, reflecting a significant drop to 833 million USD, likely due to external adversities affecting demand or operations. From Q3 2020 onwards, revenues progressively rebound, peaking in Q3 2022 at 3122 million USD. After this peak, revenues show a slight decline but remain high relative to early 2019 levels, with 2800 million USD reported in Q3 2023. This pattern indicates a strong recovery and growth in revenue streams after the mid-2020 trough.
- Working Capital Turnover Ratio
- The working capital turnover ratio exhibits substantial variability over the analyzed timeframe. Initially, the ratio climbs from 4.19 in Q1 2019 to a peak of 10.05 in Q4 2019, indicating increased efficiency in utilizing working capital to generate sales. This is followed by a sharp decline in early 2020, dropping to 2.7 in Q1 2020, suggesting diminished efficiency coinciding with lower sales and higher working capital. Subsequently, the ratio gradually improves toward the end of 2020 and continues an upward trend through 2021 and 2022, with some fluctuations. The highest recorded ratio is 11.34 in Q3 2023, pointing to enhanced effectiveness in working capital management and sales generation toward the latest period.
- Overall Insights
- The data indicates that the company experienced notable operational challenges around early to mid-2020, as reflected by the dips in sales and working capital turnover ratio coupled with fluctuating working capital. However, the subsequent periods show a recovery trend with improving sales and better working capital utilization efficiency. While working capital levels are variable, the improvement in turnover ratio suggests strategic management of resources to support revenue growth. The recent data from 2022 and 2023 depicts a strong rebound and higher operational efficiency compared to the earlier periods.
Average Inventory Processing Period
Hess Corp., average inventory processing period calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||
| Inventory turnover | 31.33 | 38.69 | 49.88 | 52.18 | 38.23 | 29.22 | 32.46 | 33.51 | 25.03 | 24.72 | 23.79 | 12.35 | 11.92 | 15.14 | 27.29 | 24.89 | 22.36 | 24.01 | 23.90 | ||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||
| Average inventory processing period1 | 12 | 9 | 7 | 7 | 10 | 12 | 11 | 11 | 15 | 15 | 15 | 30 | 31 | 24 | 13 | 15 | 16 | 15 | 15 | ||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 17 | 16 | 15 | 13 | 14 | 14 | 13 | 15 | 17 | 20 | 21 | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 8 | 7 | 6 | 6 | 6 | 7 | 8 | 10 | 11 | 14 | 18 | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 26 | 24 | 22 | 22 | 23 | 24 | 26 | 25 | 30 | 33 | 37 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 31.33 = 12
2 Click competitor name to see calculations.
- Inventory Turnover Ratio
- The inventory turnover ratio exhibits considerable fluctuations over the observed periods. From early 2019 through the end of 2019, the ratio remained relatively stable within a range of approximately 22 to 25. However, there was a sharp decline in the first three quarters of 2020, hitting a low near 12, which could indicate slower inventory movement or increased stock levels during that time. The ratio then recovered notably from late 2020, reaching a peak of over 52 in late 2022, before decreasing again to around 31 by the third quarter of 2023. This suggests periods of both accelerated and decelerated inventory turnover activities during these years.
- Average Inventory Processing Period
- The average inventory processing period inversely correlates with the inventory turnover ratio, as expected. Initially stable at about 15 days through 2019, the processing period lengthened significantly in the first three quarters of 2020, rising to approximately 30 days. This change suggests longer holding times for inventory during that period. Following this, the processing period decreased markedly, reaching a minimum of around 7 days in late 2022 and mid-2023, reflecting improvements in inventory management or faster sales. Towards the end of the dataset, the processing period slightly increased again to about 12 days, indicating a modest slowdown in inventory turnover.
- General Observations and Insights
- The data indicates an initial stable inventory management environment, disrupted notably in 2020, likely impacted by external factors such as market or supply conditions. The significant drop in inventory turnover and corresponding increase in processing period during 2020 imply challenges in moving inventory efficiently. Subsequent periods demonstrate a strong recovery and even substantial improvements, reaching peak turnover levels and minimal processing days, which may suggest enhanced operational efficiency or changes in product demand. The slight reversal towards the latest periods hints at a potential moderation or adjustment in inventory dynamics.
Average Receivable Collection Period
Hess Corp., average receivable collection period calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||
| Receivables turnover | 7.15 | 10.56 | 9.46 | 9.75 | 7.73 | 6.59 | 5.18 | 6.17 | 5.99 | 5.95 | 5.15 | 5.43 | 7.19 | 9.14 | 7.91 | 5.55 | 5.76 | 6.30 | 5.87 | ||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||
| Average receivable collection period1 | 51 | 35 | 39 | 37 | 47 | 55 | 71 | 59 | 61 | 61 | 71 | 67 | 51 | 40 | 46 | 66 | 63 | 58 | 62 | ||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 40 | 33 | 30 | 32 | 36 | 48 | 48 | 43 | 45 | 49 | 54 | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 35 | 25 | 26 | 33 | 36 | 46 | 53 | 53 | 55 | 56 | 73 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 7.15 = 51
2 Click competitor name to see calculations.
The analysis of the quarterly financial ratios related to receivables reveals significant fluctuations over the observed periods. Two key metrics are evaluated: receivables turnover ratio and average receivable collection period, both providing insights into the company’s efficiency in managing accounts receivable.
- Receivables Turnover Ratio
- The receivables turnover ratio demonstrates a variable trend with notable peaks and troughs. Starting at 5.87 in the first quarter of 2019, the ratio increased slightly mid-year but declined towards the year-end. A substantial increase occurred in the first half of 2020, peaking at 9.14 in June 2020, indicating a higher frequency of receivables collection during that period.
- Following this peak, the ratio decreased in the latter half of 2020, reaching a low of 5.43 by year-end, suggesting a slowdown in receivables collection. In 2021, the ratio hovered around the mid-5 to mid-6 range, indicating moderate stability. Entering 2022 and 2023, the ratio demonstrated a recovery and a strong upward trend, culminating at 10.56 in June 2023, the highest value in the dataset, before abruptly declining to 7.15 in September 2023. This volatile pattern suggests periods of both improved and diminished receivables efficiency and possibly reflects changing credit policies or customer payment behaviors.
- Average Receivable Collection Period
- Conversely, the average collection period, expressed in number of days, generally exhibits an inverse pattern relative to the receivables turnover ratio, as expected. Starting at 62 days in the first quarter of 2019, the period reduced to 40 days by mid-2020, signaling faster collection cycles during that time associated with the peak turnover ratios noted.
- A subsequent increase to 67 days by the end of 2020 correlates with the reduced turnover in the same period, indicating slower collections. For 2021, the average collection period remained relatively consistent, roughly between 59 and 71 days, aligning with the moderate turnover ratios.
- In 2022 and early 2023, faster collection was again observed with collection periods dropping to as low as 35 days in September 2023, consistent with the increased turnover ratios during the same interval. However, the spike back to 51 days in the last reported quarter suggests a deceleration in collections consistent with the corresponding decline in turnover ratio.
- Overall Insights
- The alternating trends in both ratios suggest fluctuating effectiveness in credit management and cash collection processes over the observed period. Periods of higher turnover and shorter collection days may reflect enhanced operational efficiency or tighter credit controls, while the declines could indicate increased credit risk or changes in customer payment patterns. The sharp increases and declines at various points emphasize the need for ongoing monitoring to optimize working capital management.
Operating Cycle
Hess Corp., operating cycle calculation (quarterly data)
No. days
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||
| Average inventory processing period | 12 | 9 | 7 | 7 | 10 | 12 | 11 | 11 | 15 | 15 | 15 | 30 | 31 | 24 | 13 | 15 | 16 | 15 | 15 | ||||||
| Average receivable collection period | 51 | 35 | 39 | 37 | 47 | 55 | 71 | 59 | 61 | 61 | 71 | 67 | 51 | 40 | 46 | 66 | 63 | 58 | 62 | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Operating cycle1 | 63 | 44 | 46 | 44 | 57 | 67 | 82 | 70 | 76 | 76 | 86 | 97 | 82 | 64 | 59 | 81 | 79 | 73 | 77 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Operating Cycle, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 57 | 49 | 45 | 45 | 50 | 62 | 61 | 58 | 62 | 69 | 75 | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 43 | 32 | 32 | 39 | 42 | 53 | 61 | 63 | 66 | 70 | 91 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 12 + 51 = 63
2 Click competitor name to see calculations.
The analysis of the quarterly financial metrics—namely the average inventory processing period, average receivable collection period, and the operating cycle—over the timeline reveals noteworthy fluctuations and trends.
- Average Inventory Processing Period
- This metric shows an initial stability around 15–16 days through 2019, followed by a sharp increase starting in the first quarter of 2020, peaking at 31 days in the third quarter of 2020. After this peak, a gradual but consistent decline is observed throughout 2021 and 2022, reaching a low of 7 days in the first and second quarters of 2023. The last quarter of 2023 shows a slight increase to 12 days. This pattern suggests a temporary slowdown in inventory turnover during 2020, possibly reflecting operational disruptions, with significant improvements in efficiency in subsequent periods.
- Average Receivable Collection Period
- The collection period exhibits a moderately volatile pattern. It initially remains in the range of approximately 58 to 66 days during 2019. A notable decline occurs in early 2020, dropping to 40 days in the second quarter, followed by a rise back to 67 days by the end of 2020. The collection period then fluctuates between mid-50s to low 70s during 2021 and early 2022, with a marked decrease toward the middle and latter part of 2022 and early 2023, plunging to a low of 35 days in the third quarter of 2023. However, the final quarter of 2023 sees a rebound to 51 days. These fluctuations indicate variability in customer payment behavior or credit policy adjustments, with some periods showing enhanced collection efficiency and others less so.
- Operating Cycle
- The operating cycle, which combines inventory processing and receivable collection periods, closely follows the trends observed in its components. It decreases significantly in the first half of 2020, from around 81 days down to 59 days, and then climbs sharply to a peak of 97 days at the end of 2020, reflecting the combined effects of increased inventory days and rising receivable periods. Post-2020, the cycle contracts steadily through 2021 and most of 2022, reaching a minimum of 44 days in mid-2023, indicative of streamlined operations and improved working capital management. There is a slight uptick in the final quarter of 2023 to 63 days, likely influenced by increased receivable days.
Overall, the data indicate a period of operational disruption and slower inventory turnover in 2020, followed by sustained improvements in inventory management and receivable collections in subsequent years. The operating cycle's pattern suggests that the company has generally managed to shorten the time between inventory acquisition and cash receipt, enhancing operational efficiency and cash flow management, though late 2023 shows a modest reversal in this trend.
Average Payables Payment Period
Hess Corp., average payables payment period calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||
| Payables turnover | 24.49 | 30.73 | 33.20 | 39.73 | 33.11 | 25.81 | 25.28 | 33.97 | 31.22 | 33.47 | 30.30 | 23.34 | 25.15 | 17.75 | 14.56 | 15.80 | 16.32 | 18.91 | 16.41 | ||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||
| Average payables payment period1 | 15 | 12 | 11 | 9 | 11 | 14 | 14 | 11 | 12 | 11 | 12 | 16 | 15 | 21 | 25 | 23 | 22 | 19 | 22 | ||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 39 | 32 | 28 | 29 | 35 | 44 | 42 | 39 | 42 | 46 | 49 | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 31 | 25 | 25 | 29 | 30 | 33 | 33 | 40 | 42 | 45 | 62 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 24.49 = 15
2 Click competitor name to see calculations.
The analysis of the payables management metrics over the observed periods reveals several notable trends and fluctuations. The focus lies on two key indicators: payables turnover and the average payables payment period, both reflecting the company's efficiency in managing its short-term obligations to suppliers.
- Payables Turnover
- The payables turnover ratio exhibits a general upward trend from early 2019 through 2023, although with some volatility. Starting at 16.41 in March 2019, the ratio initially fluctuates slightly but remains relatively stable around the mid-teens up to mid-2020. A sharp increase occurs toward the end of 2020, peaking at 33.97 in December 2021, indicating an accelerated rate of payments to suppliers compared to prior periods. After this peak, the turnover ratio shows a decline in 2022 and 2023, dropping to 24.49 by September 2023. This fluctuating pattern suggests periods of shifting payment strategies or changing supplier credit terms, with notable acceleration in payables turnover during late 2020 and 2021.
- Average Payables Payment Period
- This metric inversely correlates with the payables turnover ratio, measuring the average number of days the company takes to settle its payables. Beginning with an average payment period of 22 days in March 2019, the company gradually reduces its payment days, reaching a low of 9 days in December 2022. The period lengthened somewhat to 15 days by September 2023, yet still remains below earlier years' averages. The shortened payment period observed especially from late 2020 to 2022 reflects a more rapid settlement of payables, consistent with the heightened payables turnover during the same timeframe.
- Interpretation and Insights
- The overall trend indicates an initial phase of moderate payment speed followed by a strategic acceleration in payables settlement around late 2020 through 2021. This could be attributed to efforts to strengthen supplier relationships, take advantage of early payment discounts, or shifts in cash flow capabilities. The slight reversal seen in 2023, with a lengthening of the payment period and reduction in turnover ratio, may reflect changed liquidity management approaches or altered market conditions impacting payment policies. The company's ability to modulate payables management dynamically is evident from these patterns.
Cash Conversion Cycle
Hess Corp., cash conversion cycle calculation (quarterly data)
No. days
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||
| Average inventory processing period | 12 | 9 | 7 | 7 | 10 | 12 | 11 | 11 | 15 | 15 | 15 | 30 | 31 | 24 | 13 | 15 | 16 | 15 | 15 | ||||||
| Average receivable collection period | 51 | 35 | 39 | 37 | 47 | 55 | 71 | 59 | 61 | 61 | 71 | 67 | 51 | 40 | 46 | 66 | 63 | 58 | 62 | ||||||
| Average payables payment period | 15 | 12 | 11 | 9 | 11 | 14 | 14 | 11 | 12 | 11 | 12 | 16 | 15 | 21 | 25 | 23 | 22 | 19 | 22 | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Cash conversion cycle1 | 48 | 32 | 35 | 35 | 46 | 53 | 68 | 59 | 64 | 65 | 74 | 81 | 67 | 43 | 34 | 58 | 57 | 54 | 55 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Cash Conversion Cycle, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 18 | 17 | 17 | 16 | 15 | 18 | 19 | 19 | 20 | 23 | 26 | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 12 | 7 | 7 | 10 | 12 | 20 | 28 | 23 | 24 | 25 | 29 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 12 + 51 – 15 = 48
2 Click competitor name to see calculations.
The quarterly financial data reveals several notable trends in the company's operational efficiency metrics over the analyzed periods. The focus lies on average inventory processing period, average receivable collection period, average payables payment period, and the overall cash conversion cycle.
- Average Inventory Processing Period
- This period exhibited fluctuations over the years. Initially stable around 15-16 days in 2019, it then saw a sharp increase in mid to late 2020, peaking at 31 days in September 2020. From 2021 onward, a clear downward trend emerged, with the processing period reducing steadily to a low of 7 days in the first half of 2023, before slightly rising to 9 and 12 days in the later quarters of 2023. This indicates improved inventory turnover and potentially enhanced inventory management efficiencies during recent periods.
- Average Receivable Collection Period
- The receivable collection period showed moderate variability throughout the timeframe. It started at 62 days in March 2019 and fluctuated between the mid-40s and low-70s thereafter. Notably, a low point occurred in June 2020 at 40 days, followed by a rise to 67 days by December 2020. Throughout 2021 and 2022, this metric oscillated generally in the 50s to low 70s range, with the shortest collection periods observed in mid-to-late 2023, dropping as low as 35 days in September 2023 before increasing again to 51 days by the end of the latest quarter. These shifts suggest cyclical changes in receivables turnover potentially influenced by credit policies or customer payment behaviors.
- Average Payables Payment Period
- The payables payment period demonstrated a gradual decreasing trend over time. Starting from approximately 22 days in early 2019, it continuously declined, reaching a low of 9 days in June 2022. While there was a slight increase to 15 days by September 2023, this overall trend points to faster payment to suppliers and possibly tighter cash management practices implemented during the period.
- Cash Conversion Cycle
- The cash conversion cycle reflected the combined effects of the aforementioned metrics. It was relatively stable at around 55 to 58 days through 2019, before dropping significantly to 34 days in March 2020, likely driven by shorter inventory and receivables periods. However, it then rose sharply to a peak of 81 days by December 2020, corresponding with the increase in inventory processing and receivable collection periods. From early 2021, the cash conversion cycle trended downward, reaching a low of 32 days in June 2023, indicating improved efficiency in converting inventory and receivables into cash. A slight increase to 48 days by September 2023 suggests some recent elongation in the cycle.
Overall, the data suggests a period of operational challenges around 2020, likely affecting inventory and receivable management, followed by substantial improvements in efficiency in subsequent years. Inventory turnover and payables payment periods have improved markedly, contributing to a reduced cash conversion cycle, which enhances liquidity and working capital management.