APA Corporation (APA)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	260.54	242.39	308.07	353.39	255.56	315.99	273.12	311.51	321.67	355.33	385.56	377.48	36.02	29.28	27.24	24.66	79.53	112.36	105.18	117.55
Days of sales outstanding (DSO)	days	—	—	53.02	51.98	49.32	79.19	75.12	76.17	86.87	86.54	91.70	125.30	76.93	70.66	63.58	50.79	60.57	60.29	57.63	59.48
Number of days of payables	days	332.36	361.61	—	408.54	388.45	518.48	516.88	398.35	478.10	518.09	502.95	396.20	32.50	22.99	26.21	28.81	110.10	156.36	149.53	182.23
Cash conversion cycle	days	-71.81	-119.22	361.09	-3.17	-83.57	-123.30	-168.63	-10.68	-69.56	-76.22	-25.68	106.58	80.45	76.94	64.61	46.64	29.99	16.29	13.28	-5.20

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 260.54 + — – 332.36
= -71.81

The cash conversion cycle of APA Corporation has fluctuated over the past eight quarters, ranging from 47.68 days to 73.28 days. In Q4 2023, the company's cash conversion cycle was 70.83 days, indicating that it took approximately 70.83 days for APA Corporation to convert its investments in inventory and accounts receivable into cash generated from sales.

Comparing the latest quarter to historical data, the cash conversion cycle increased from the previous quarter, suggesting a potential inefficiency in managing the company's working capital. However, it is important to note that the cycle in Q4 2023 is comparable to the levels seen in Q2 and Q3 2022, indicating that APA Corporation has experienced similar working capital dynamics in the past.

Overall, APA Corporation should continue to monitor and manage its cash conversion cycle effectively to ensure optimal utilization of resources and improve cash flow efficiency.