California Resources Corp (CRC)

Short-term

Turnover ratios

California Resources Corp's activity ratios provide insight into how efficiently the company is managing its resources and generating revenue.

1. Inventory Turnover: The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period. California Resources Corp's inventory turnover has decreased significantly from 32.91 in 2019 to 5.77 in 2024. This could indicate slower sales, excess inventory, or changes in the company's production or sales strategy.

2. Receivables Turnover: The receivables turnover ratio shows how quickly a company collects payments from its customers. California Resources Corp's receivables turnover fluctuated over the years, with a peak of 11.92 in 2023. This suggests improvements in the company's credit policies or better management of accounts receivable.

3. Payables Turnover: The payables turnover ratio measures how quickly a company pays its suppliers. California Resources Corp's payables turnover decreased from 7.45 in 2019 to 1.41 in 2024. A declining payables turnover could indicate extended payment terms with suppliers or potential liquidity issues.

4. Working Capital Turnover: The working capital turnover ratio evaluates how effectively a company utilizes its working capital to generate sales. California Resources Corp's working capital turnover was not available for 2019 and 2021 but showed a significant increase to 72.68 in 2024. A high working capital turnover indicates efficient utilization of resources to drive revenue growth.

Overall, the trends in California Resources Corp's activity ratios reflect changes in its operating efficiency, inventory management, receivables collection, and payment practices over the years. Monitoring these ratios can help stakeholders assess the company's operational performance and financial health.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and operations. Let's analyze the activity ratios of California Resources Corp based on the provided data:

1. Days of Inventory on Hand (DOH):
- The trend for DOH shows an increase from 11.09 days in 2019 to 72.60 days in 2023, before decreasing slightly to 63.29 days in 2024.
- A higher DOH indicates that inventory is held for a longer period, which may tie up capital and lead to potential obsolescence or storage costs.
- California Resources Corp's inventory management has shown fluctuations over the years, suggesting the need for closer monitoring and potential optimization.

2. Days of Sales Outstanding (DSO):
- DSO increased from 38.38 days in 2019 to 49.75 days in 2022 before decreasing to 48.62 days in 2024.
- A higher DSO implies that a company takes longer to collect its accounts receivable, potentially impacting cash flow and liquidity.
- The fluctuations in DSO indicate varying efficiency in credit and collection processes at California Resources Corp.

3. Number of Days of Payables:
- The number of days of payables increased significantly from 49.00 days in 2019 to 406.21 days in 2022, before decreasing to 259.51 days in 2024.
- A longer period of payables suggests that the company is taking more time to pay its suppliers, which can impact supplier relationships and liquidity.
- The sharp increase in days of payables in 2021 and 2022 may indicate changes in payment policies or negotiation strategies.

In conclusion, the analysis of California Resources Corp's activity ratios reveals fluctuations and trends that highlight the company's inventory management, accounts receivable collection, and payment practices. Monitoring and optimizing these ratios can help improve operational efficiency and financial performance over time.

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Long-term

The Fixed Asset Turnover ratio measures the efficiency of a company in generating sales revenue from its investment in fixed assets. California Resources Corp's Fixed Asset Turnover has shown an improvement over the years, increasing from 0.41 in 2019 to 1.01 in 2023, signifying that the company is able to generate more sales from its fixed assets.

On the other hand, the Total Asset Turnover ratio reflects how efficiently a company utilizes its total assets to generate sales. California Resources Corp's Total Asset Turnover has fluctuated over the years, reaching its peak at 0.70 in 2023. This indicates that the company has been able to generate sales relatively efficiently compared to its total asset base during that year.

Overall, the trend in both ratios suggests that California Resources Corp has been improving its operational efficiency and effectively utilizing its assets to drive sales growth over the years, with varying levels of success in different time periods.