ConocoPhillips (COP)

Activity ratios

Short-term

Turnover ratios

	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
Inventory turnover	16.57	19.80	24.21	27.36	28.76	27.39	23.02	18.90	16.59	14.82	11.58	10.33	9.72	9.37	10.80	16.73	12.49	14.51	13.53	15.54
Receivables turnover	—	—	—	5,811.00	7,135.82	5,361.14	933.84	768.06	366.62	285.71	242.47	171.22	161.93	162.95	17.66	13.88	10.78	10.76	10.67	10.22
Payables turnover	—	—	—	6.78	5.73	5.38	4.86	4.55	4.01	3.77	3.67	3.00	3.65	4.37	5.15	4.19	4.03	4.40	4.07	4.13
Working capital turnover	12.98	8.76	16.88	16.56	13.30	11.63	9.84	9.02	11.37	3.73	3.25	3.20	2.80	3.33	3.89	4.45	3.72	4.19	5.73	6.26

Conoco Phillips' activity ratios provide insights into the efficiency of the company's operations in managing its assets and liabilities.

1. Inventory turnover: This ratio measures how many times during a period inventory is sold and replaced. Conoco Phillips has shown a consistent trend of decreasing inventory turnover over the quarters, indicating a slower rate of inventory turnover. However, the company still maintains a relatively high turnover ratio, which suggests effective management of inventory levels.

2. Receivables turnover: This ratio indicates how many times receivables are collected during a period. Conoco Phillips has seen fluctuations in receivables turnover, but overall there is a positive trend of improvement over recent quarters. The company is collecting its receivables at a faster rate, which is a positive sign for cash flow and liquidity.

3. Payables turnover: This ratio reflects how quickly the company pays its suppliers. Conoco Phillips has maintained a relatively stable payables turnover ratio over the quarters, indicating consistent payment terms with suppliers. A higher payables turnover ratio suggests that the company is efficiently managing its payables.

4. Working capital turnover: This ratio measures how efficiently the company generates sales from its working capital. Conoco Phillips has shown variability in its working capital turnover, with fluctuations in the ability to generate sales from its current assets. However, the company has generally maintained a healthy turnover ratio, reflecting effective utilization of working capital to support sales activities.

Overall, Conoco Phillips' activity ratios indicate a reasonable level of operational efficiency in managing its assets and liabilities to support business operations and generate sales.

Average number of days

		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	22.03	18.44	15.08	13.34	12.69	13.32	15.86	19.31	22.00	24.64	31.53	35.33	37.56	38.94	33.81	21.82	29.23	25.15	26.98	23.49
Days of sales outstanding (DSO)	days	—	—	—	0.06	0.05	0.07	0.39	0.48	1.00	1.28	1.51	2.13	2.25	2.24	20.66	26.30	33.85	33.94	34.20	35.71
Number of days of payables	days	—	—	—	53.84	63.64	67.84	75.11	80.18	91.09	96.87	99.50	121.60	100.06	83.50	70.92	87.17	90.48	82.90	89.64	88.39

Conoco Phillips' activity ratios provide insights into the efficiency of the company's operations and management of working capital.

1. Days of Inventory on Hand (DOH):
- Conoco Phillips' DOH has been fluctuating over the quarters, indicating variability in inventory management efficiency.
- The gradual increase in DOH from Q1 2023 to Q4 2023 suggests a potential buildup of inventory relative to sales.
- The company should focus on optimizing inventory levels to avoid excess holding costs and potential obsolescence.

2. Days of Sales Outstanding (DSO):
- Conoco Phillips has shown a decreasing trend in DSO from Q1 2022 to Q2 2023, indicating improved efficiency in collecting accounts receivable.
- A lower DSO means the company is collecting sales revenue more quickly, which can improve cash flow and liquidity.
- The declining DSO reflects effective credit management and timely collection efforts by Conoco Phillips.

3. Number of Days of Payables:
- The number of days of payables for Conoco Phillips has fluctuated over the quarters but generally remained within a certain range.
- An increase in days of payables may indicate that the company is taking longer to pay its vendors, potentially improving cash flow.
- However, excessively lengthening payment terms could strain supplier relationships and impact future purchasing terms.

Overall, Conoco Phillips should strive to strike a balance between maintaining optimal inventory levels, efficiently collecting receivables, and managing payables effectively to enhance its operational efficiency and financial health.

Long-term

	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
Fixed asset turnover	0.81	0.91	1.02	1.16	1.21	1.18	1.02	0.83	0.71	0.64	0.51	0.41	0.47	0.52	0.66	0.77	0.87	0.89	0.88	0.86
Total asset turnover	0.59	0.64	0.74	0.83	0.84	0.79	0.70	0.58	0.51	0.42	0.34	0.28	0.30	0.34	0.43	0.48	0.52	0.55	0.55	0.55

Conoco Phillips' long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insight into the efficiency of the company's utilization of its assets to generate revenue.

1. Fixed Asset Turnover:
Conoco Phillips' fixed asset turnover has been on a declining trend from Q1 2022 to Q4 2023, decreasing from 1.16 to 0.80. This signifies that the company is generating less revenue for each dollar invested in fixed assets, indicating a decrease in efficiency in utilizing its long-term assets to generate sales. Although there was a slight increase in Q2 and Q3 2023, the overall decreasing trend raises concerns about the company's ability to efficiently utilize its fixed assets.

2. Total Asset Turnover:
Similarly, Conoco Phillips' total asset turnover has also exhibited a declining trend from Q1 2022 to Q4 2023, decreasing from 0.83 to 0.59. This indicates that the company is generating less revenue for each dollar invested in total assets, reflecting a decrease in the efficiency of the company in generating sales from its total asset base. The declining trend in total asset turnover raises concerns about the overall efficiency of Conoco Phillips in utilizing its assets to generate revenue.

In conclusion, the decline in both fixed asset turnover and total asset turnover ratios for Conoco Phillips over the specified periods signals potential inefficiencies in the company's utilization of its long-term assets to generate revenue. Further analysis and comparison with industry benchmarks may be necessary to understand the reasons behind this trend and to identify potential areas for improvement in asset utilization efficiency.