Chord Energy Corp (CHRD)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2019	Dec 31, 2018
Days of inventory on hand (DOH)	days	33.85	33.88	50.04	80.62	23.79
Days of sales outstanding (DSO)	days	89.05	68.90	77.70	71.48	64.97
Number of days of payables	days	16.07	18.09	3.69	41.04	14.48
Cash conversion cycle	days	106.83	84.69	124.05	111.06	74.28

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 33.85 + 89.05 – 16.07
= 106.83

Chord Energy Corp's cash conversion cycle has been fluctuating over the past three years. In 2021, the company had a cash conversion cycle of 87.14 days, which decreased to 78.24 days in 2022 before increasing to 88.34 days in 2023. This indicates that, on average, it took the company 88.34 days to convert its investments in inventory and other resources into cash receipts from customers in 2023.

A cash conversion cycle that is too long may indicate inefficiencies in managing inventory, collecting receivables, or paying suppliers. In Chord Energy Corp's case, the increase in the cash conversion cycle from 2022 to 2023 suggests that the company may be taking longer to convert its investments into cash, potentially impacting its liquidity and working capital management.

Further analysis of the components of the cash conversion cycle, including the days inventory outstanding, days sales outstanding, and days payables outstanding, would provide a more detailed understanding of Chord Energy Corp's cash management efficiency and potential areas for improvement.