Civitas Resources Inc (CIVI)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	—	—	—	—	55.99	10.56	135.99	4.33	12.02	21.14	17.08	11.69	11.85	32.51	39.71	33.37	20.68	25.79	23.24	21.74
Days of sales outstanding (DSO)	days	46.31	41.41	45.13	56.84	56.03	68.22	23.64	22.57	33.21	35.48	59.26	89.44	143.24	66.13	81.39	60.05	55.47	44.02	36.83	20.10
Number of days of payables	days	5.70	20.10	7.17	28.18	15.01	31.70	10.53	9.20	11.90	12.21	9.80	23.63	18.78	31.38	37.33	48.68	4.35	9.99	26.18	44.04
Cash conversion cycle	days	40.61	21.32	37.96	28.66	97.00	47.08	149.09	17.69	33.33	44.40	66.53	77.50	136.31	67.26	83.78	44.74	71.80	59.82	33.89	-2.19

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 46.31 – 5.70
= 40.61

The cash conversion cycle of Civitas Resources Inc has shown fluctuations over the period analyzed.

The company's cash conversion cycle, which represents the time it takes to convert its investments in inventory and other resources into cash flows from sales, started on a negative note at -2.19 days on March 31, 2020. This indicates that the company was generating cash from operating activities before having to pay its suppliers.

The cycle turned positive in the subsequent periods and reached 136.31 days by December 31, 2021, suggesting a significant increase in the time it took for the company to convert its investments into cash during that period. This may indicate challenges with managing inventory, collection from customers, or payment to suppliers efficiently.

However, there was a notable improvement in the cash conversion cycle by June 30, 2022, dropping to 33.33 days, indicating a more efficient conversion of resources into cash during that quarter.

After this improvement, there were fluctuations in the cash conversion cycle in the following periods, showing varying degrees of efficiency in managing working capital and cash flows.

Overall, Civitas Resources Inc should continue to closely monitor and manage its cash conversion cycle to ensure optimal efficiency in converting investments into cash and improving its financial performance.