Civitas Resources Inc (CIVI)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	2.52	12.01	11.82	20.62
Days of sales outstanding (DSO)	days	45.33	56.03	33.21	143.24	55.47
Number of days of payables	days	5.67	14.92	11.89	18.73	4.34
Cash conversion cycle	days	39.66	43.62	33.33	136.33	71.75

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 45.33 – 5.67
= 39.66

The cash conversion cycle of Civitas Resources Inc has shown fluctuations over the years based on the provided data.

- As of December 31, 2020, the company's cash conversion cycle was 71.75 days. This means that it took Civitas Resources around 71.75 days to convert its investments in inventory and accounts receivable into cash.

- By December 31, 2021, the cash conversion cycle had increased significantly to 136.33 days. This suggests that the company was taking a longer time to convert its assets into cash, which could indicate potential liquidity challenges or inefficiencies in managing working capital.

- However, by December 31, 2022, the cash conversion cycle decreased sharply to 33.33 days. This reduction indicates that Civitas Resources improved its efficiency in converting its resources into cash, possibly by streamlining operations or improving inventory management.

- The cash conversion cycle remained relatively low as of December 31, 2023, at 43.62 days, signaling continued efficiency in converting assets into cash.

- Lastly, by December 31, 2024, the cash conversion cycle further decreased to 39.66 days, reaffirming the company's efficient management of working capital.

Overall, Civitas Resources Inc has experienced fluctuations in its cash conversion cycle over the years, with notable improvements in efficiency observed in certain periods. Monitoring this metric is crucial for assessing the company's operational effectiveness and liquidity management.