ONEOK Inc. (NYSE:OKE)

The financial data reveals discernible trends in the company’s operational efficiency and cash flow management over several quarters.

Inventory Turnover

The inventory turnover ratio exhibited fluctuations across the periods. Initially, it decreased from 22.14 to a low around 10.53 in mid-2020, signifying slower inventory movement during that time. From 2021 onward, the ratio steadily improved, reaching a peak of 31.51 by mid-2023, indicating enhanced efficiency in managing and selling inventory.

Receivables Turnover

The receivables turnover ratio demonstrated variability, with peaks near 19.14 in early 2020 and again around 18.77 by mid-2023. A decline was notable in the middle periods, with ratios dipping below 10. This suggests challenges in collecting receivables promptly during certain quarters, but collection efficiency showed marked improvement towards the end of the series.

Payables Turnover

Payables turnover fluctuated but showed an overall upward trend, rising from approximately 8.77 at the start to 16.47 by mid-2023. The increase suggests the company is paying its suppliers more quickly in recent periods, which could reflect improved liquidity or changes in supplier agreements.

Working Capital Turnover

Where data is available, the working capital turnover displayed significant improvement by the latest quarters, surging to around 55.5. This heightened turnover points to more effective utilization of working capital to generate sales, indicating stronger operational performance.

Average Inventory Processing Period

The average inventory processing period varied inversely to the inventory turnover, ranging from 16 days at the start, increasing up to 35 days in mid-2020, and then gradually declining to 12 days by mid-2023. This reflects expedited inventory management and faster movement of goods in recent periods.

Average Receivable Collection Period

This period ranged from the low twenties to as high as 40 days during 2021 but experienced a declining trend after that, falling to 19 days by mid-2023. The reduction indicates shorter collection times and better receivables management in the latter periods.

Operating Cycle

The operating cycle extended notably during 2020 and 2021, reaching up to 70 days, but was reduced progressively thereafter, down to 31 days by mid-2023. This contraction suggests a more efficient conversion of inventory and receivables back into cash over time.

Average Payables Payment Period

The average payables payment period generally decreased from a peak of 65 days in late 2019 to 22 days by mid-2023. This shows the company accelerated its payments to suppliers in recent quarters.

Cash Conversion Cycle

The cash conversion cycle fluctuated around zero in the early periods, dipped slightly negative at times, indicating cash inflows were quicker than outflows. It turned positive between 2020 and 2021, reaching a maximum of 19 days, and stabilized around 9 days thereafter. The positive but modest cash conversion cycle suggests balanced cash flow timing with moderate working capital investment.

Overall, the data indicates progressive improvements in operational efficiency, with faster inventory turnover, reduced receivable collection periods, and shortened operating and payables cycles in the most recent periods. These trends suggest enhanced working capital management and liquidity position progression over time.

Cost of Sales and Fuel

The cost of sales and fuel exhibited notable fluctuations across the analyzed quarters. From early 2019 through 2020, this expense showed a declining trend reaching a low point around mid-2020. A significant increase commenced thereafter, peaking in late 2021, which indicates heightened operational expenses or increased fuel costs. In 2022 and early 2023, the cost somewhat stabilized but showed a downward movement in the most recent quarters, suggesting recent cost containment or reduced fuel consumption.

Inventory Levels

Inventory values demonstrated variability without a clear linear trend. Throughout 2019 and early 2020, inventory levels oscillated moderately. A pronounced increase was observed towards the end of 2021 and into 2022, reaching the highest levels in mid-2022. Following this peak, inventory showed a gradual reduction into 2023, which may reflect inventory drawdowns or improved turnover management.

Inventory Turnover Ratio

Inventory turnover displayed significant variation over the periods. Early in the timeline, turnover ratios were relatively high, indicating rapid movement of inventory. A decrease occurred during 2019 and most of 2020, reflecting slower inventory turnover and possibly weaker sales or excess stock. From late 2021 onward, a notable improvement in turnover ratio is apparent, culminating in some of the highest turnover figures in early 2023. This trend suggests enhanced efficiency in inventory management or stronger demand patterns during recent periods.

The analysis of the financial data reveals notable variations in revenues, accounts receivable, and receivables turnover over the examined periods.

Revenues

Revenues experienced fluctuations throughout the periods. Initially, there was a declining trend from March 31, 2019, through June 30, 2020, reaching a trough at 1,661 million US dollars. Beginning in the third quarter of 2020, revenues showed a significant rebound, peaking at 5,997 million US dollars in June 30, 2022. Subsequently, a declining trend emerged again from the third quarter of 2022 to June 30, 2023, with revenues decreasing to 3,732 million US dollars.

Accounts Receivable, Net

The accounts receivable balance generally mirrored revenue trends but with some lag. From March 31, 2019, to December 31, 2019, accounts receivable remained relatively stable, fluctuating between 669 and 835 million US dollars. There was a decline by March 31, 2020, followed by a progressive increase reaching its highest point at 1,779 million US dollars by June 30, 2022. Following this peak, accounts receivable decreased to 1,023 million US dollars by June 30, 2023, aligning with the revenue decline observed during the same timeframe.

Receivables Turnover

The receivables turnover ratio demonstrated considerable variability, inversely correlating with accounts receivable levels. The ratio peaked at 19.14 times in March 31, 2020, indicating faster collection of receivables despite declining revenues. Subsequently, turnover declined to the lowest point of 9.14 times in September 30, 2021. After this low, receivables turnover increased steadily, reaching the highest observed value of 18.77 times by June 30, 2023, suggesting improved efficiency in collecting receivables toward the end of the period.

Overall, the data reflect cyclical revenue patterns with associated changes in accounts receivable and collection efficiency. The periods of strong revenue growth correspond with increasing accounts receivable balances and reduced turnover ratios, while periods of declining revenues are accompanied by decreasing accounts receivable and improved turnover ratios, indicative of effective working capital management adjustments over time.

Cost of Sales and Fuel

The cost of sales and fuel exhibited notable fluctuations over the analyzed periods. Initially, there was a general decline from the first quarter of 2019 through mid-2020, reaching a low point in June 2020. Subsequently, a sharp increase occurred starting from the third quarter of 2020, peaking in the last quarter of 2021. After peaking, the costs began to decline steadily throughout 2022 and into the first half of 2023. This pattern suggests a strong upward pressure on costs during late 2020 and 2021, followed by a gradual reduction in recent periods.

Accounts Payable

Accounts payable displayed a generally increasing trend from the beginning of 2019 until mid-2022, indicating a rising obligation to suppliers or service providers. From mid-2022 onward, accounts payable began to decline, which aligns with the reduction in cost of sales and fuel observed during the same timeframe. The peak in accounts payable around mid-2022 suggests heightened operational expenditures or extended payment terms during this period, subsequently followed by a normalization or improved payment management through mid-2023.

Payables Turnover Ratio

The payables turnover ratio showed considerable variability throughout the timeframe. Early periods in 2019 displayed a moderate ratio that declined toward the end of 2019, reaching its lowest value in the last quarter of 2019. From early 2020 through mid-2021, the ratio fluctuated without a clear directional trend. However, from late 2021 onwards, a marked upward trend is evident, with the turnover ratio increasing significantly through the first half of 2023, reaching its highest observed values. This increase suggests a faster payment cycle or improved efficiency in settling payables during recent quarters.

Overall Analysis

The data reflects an environment of shifting cost pressures and changing payment dynamics. Initial reductions in cost of sales and accounts payable were followed by a period of rising expenses and liabilities. Enhanced payables turnover in recent periods indicates potentially improved liquidity management or intensified supplier negotiations. Together, these trends may reflect responses to external market factors or internal operational adjustments aimed at optimizing cash flow and managing costs more effectively.

Working Capital

The working capital values display significant volatility over the period analyzed. From the beginning of 2019 to the end of 2019, the values fluctuate considerably, transitioning from negative figures to positive and back to negative. Early 2020 marks a period of positive working capital, peaking at 907 million USD in the second quarter, before declining again towards negative territory in late 2021 and 2022. Notably, the end of 2022 sees the working capital reaching a substantial negative value of -1373 million USD, followed by a recovery into positive figures by mid-2023. This pattern suggests cycles of liquidity variations possibly driven by operational or investment activities and shifting current assets and liabilities.

Revenues

Revenues demonstrate a relatively upward trajectory with pronounced seasonal and cyclical changes. Initial quarters in 2019 show moderate revenues in the range of approximately 2200 to 2800 million USD. A marked decline occurs in early to mid-2020, reflecting a likely external impact, with the lowest revenue in the second quarter of 2020 at 1661 million USD. From late 2020 onwards, revenues recover robustly, reaching a peak above 5900 million USD in early 2022. After this peak, there is a gradual decline through 2022 and into 2023, with revenues decreasing to around 3700 million USD by mid-2023. This pattern indicates sensitivity to market or economic conditions with periods of growth and contraction.

Working Capital Turnover

Working capital turnover ratios are sporadically reported but show very high values when present, particularly in 2019 Q3 and 2020 Q2-Q4, indicating efficient use of working capital during those quarters. The ratio peaks dramatically in 2023, reaching values exceeding 55, which suggests an exceptional level of revenue generation from each unit of working capital, reflecting either improved operational efficiency or working capital constraints. The absence of data in several quarters limits a continuous trend analysis but the available figures highlight periods of strong capital utilization.

Inventory Turnover Ratio

The inventory turnover ratio exhibited notable fluctuations throughout the periods analyzed. Initially, it was relatively high at over 22 in early 2019, then declined steadily through late 2019 and mid-2020, reaching a low near 10.53. Starting from late 2020, the ratio showed a general upward trend, rising significantly in 2021 and continuing to strengthen through 2022 and into mid-2023, peaking above 31. This pattern indicates that inventory was being sold and replenished at an increasingly faster rate in the most recent periods compared to earlier years.

Average Inventory Processing Period

The average number of days to process inventory moved inversely to the turnover ratio, as expected. Initially consistent at around 16 days in early 2019, the period increased sharply through 2019 and into 2020, reaching a peak of approximately 35 days in mid-2020. Following this peak, the processing period decreased steadily, showing a marked acceleration in inventory handling from late 2020 onward. By 2021, the duration shortened significantly to about 17–18 days, and it further decreased to approximately 12 days by mid-2023. This reduction suggests enhanced efficiency in inventory management and quicker conversion of inventory into sales.

Overall Trends and Insights

The inverse relationship between the inventory turnover ratio and the average inventory processing period is consistent with effective inventory management. The early decline in turnover coupled with a lengthening processing period may reflect challenges or slower sales during that timeframe, possibly linked to broader economic factors. The subsequent strong improvement in both metrics indicates strategic adjustments that improved liquidity and operational efficiency, allowing the company to reduce stock levels while maintaining or increasing sales velocity. These trends demonstrate a positive progression towards optimized inventory control over the recent years.

Receivables Turnover Ratio

The receivables turnover ratio exhibits notable fluctuations over the analyzed quarters. Initially, the ratio started at 15.1 in the first quarter of 2019, peaking at 19.14 in the first quarter of 2020. A decline followed throughout 2020, reaching a low of 10.29 by the end of that year. The ratio remained relatively stable yet lower during 2021, averaging around 10 to 11. However, from early 2022, an upward trend is observed, culminating in a significant increase to approximately 18.7 by mid-2023. This indicates an improving ability to collect receivables more frequently on an annual basis in recent periods compared to the subdued performance during 2020 and 2021.

Average Receivable Collection Period

The average collection period in days inversely mirrors the receivables turnover trend. It began at 24 days in early 2019, decreased to 19 days by the first quarter of 2020, suggesting quicker collections at that time. This was followed by a steady increase during 2020 and 2021, peaking at 40 days in the third quarter of 2021, indicating slower collections. From late 2021 onwards, the collection period progressively shortened, reaching 19 days again by mid-2023. The reduction to earlier low levels demonstrates enhanced efficiency in receivables collection during the most recent quarters.

Overall Trend and Insights

The data reveals a period of decreased efficiency in receivables management spanning primarily 2020 and 2021, likely affected by external or operational challenges, as reflected by lower turnover ratios and longer collection periods. Since early 2022, there has been a marked recovery and improvement in receivables turnover and collection days, indicating strengthened credit and collection policies or improved customer payment behaviors. Achieving a receivables turnover close to 19 and collection periods near 19 days suggests the company’s current collection efficiency is robust and improving compared to the prior reduced-performance years.

Average Inventory Processing Period

The average inventory processing period demonstrated a fluctuating trend over the analyzed quarters. Initially, it remained steady at 16 days during the first two quarters of 2019, then increased notably to 27 days by the end of 2019. A peak occurred in mid-2020 with values reaching 35 days, followed by a gradual decline throughout 2021 and into 2023, reaching a low of 12 days. This indicates an improvement in inventory turnover efficiency in recent periods after a phase of extended processing durations.

Average Receivable Collection Period

The average receivable collection period exhibited considerable variability. It started around the mid-20s (days) in early 2019, experienced an increase to 35-40 days during 2020 and early 2021, representing a slowdown in collections. From late 2021 onwards, there was a consistent downward trend, with collection periods decreasing to below 20 days by mid-2023. This improvement suggests enhanced effectiveness in receivables management and cash collection over the latest periods.

Operating Cycle

The operating cycle followed a similar pattern to the other two metrics, showing an increase from 40 days at the beginning of 2019 to a peak of 70 days by late 2021. This indicates a lengthening of the time needed to convert inventory and receivables into cash. Subsequently, the operating cycle shortened steadily, dropping to 31 days by mid-2023. The reduction in the operating cycle reflects overall operational efficiency gains, likely driven by improvements in both inventory processing and receivable collection periods.

The analysis of the payables turnover ratio over the examined periods reveals significant fluctuations with an overall upward trend in the most recent years. Initially, the ratio showed moderate variability, reaching a low point toward the end of 2019. In contrast, the period from early 2022 through mid-2023 demonstrates a marked increase in payables turnover, peaking at 16.47 in June 2023, suggesting a more rapid settlement of accounts payable during this timeframe.

Correspondingly, the average payables payment period exhibits an inverse relationship to the turnover ratio, as expected. Early data points indicate longer payment periods, with values peaking at 65 days in late 2019. However, from 2021 onward, the payment period steadily decreases, reaching a minimum of 22 days by mid-2023. This reduction indicates an acceleration in payment practices, aligning with the rise in the payables turnover ratio.

Payables Turnover Ratio

The ratio fluctuated between approximately 5.6 and 9.3 from 2019 through 2021, showing some inconsistency in the frequency with which payables were paid. Starting in 2022, the ratio increased notably, demonstrating a trend towards faster payments to suppliers and improved liquidity management.

Average Payables Payment Period

This metric ranged widely in the early periods, from around 39 to 65 days, indicating variability in payment speed. Beginning in 2021, there was a clear downward trend, with the number of days to settle payables reducing to just over three weeks by mid-2023, reflecting more efficient working capital management.

Relationship Between Metrics

There is a clear inverse correlation between the payables turnover ratio and the average payment period. As the turnover ratio increased, indicating faster payment cycles, the average number of days to pay liabilities decreased, suggesting improved supplier relations or changes in payment policies.

Implications

The movement towards a higher payables turnover and shorter payment period implies enhanced cash flow management. This may benefit supplier relationships and could reflect stronger operational performance or improved negotiation power with creditors. However, further investigation would be needed to assess any impact on liquidity or credit terms.

Average inventory processing period

This period exhibited a generally fluctuating trend from 2019 through mid-2020, peaking at 35 days in June 2020. Following this peak, a steady decline is observed starting from late 2020 through 2023, reducing from around 26 days at the end of 2020 to a consistent 12 days in early 2023. This decline suggests improved inventory turnover and potentially more efficient inventory management in recent periods.

Average receivable collection period

The receivable collection days fluctuated moderately over the analyzed timeframe. Starting at 24 days in early 2019, it peaked at 40 days in late 2021, indicating slower collections at that point. Subsequently, it decreased progressively to 19 days by mid-2023. This improvement reflects enhanced effectiveness in receivables management and faster cash inflows from customers in the most recent quarters.

Average payables payment period

The payables payment period showed considerable variability, with a high of 65 days in December 2019 followed by a decline to the low 20s in mid-2023. Notably, a significant reduction occurred starting from late 2021, dropping from 40 days to 22 days by June 2023. This decreasing trend indicates quicker payments to suppliers, which might impact the company’s cash outflow timing and supplier relations.

Cash conversion cycle

The cash conversion cycle was predominantly negative or near zero in early periods (2019), indicating a strong liquidity position where the company might have received cash before paying its suppliers. However, from early 2020, the cycle shifted into positive territory, peaking at 19 days in September 2020. Afterward, it stabilized within a narrow range between 6 and 15 days until 2023. The stabilization around 9 days in recent quarters suggests consistent working capital management with moderate time lapses between cash outflows and inflows.