California Resources Corp (CRC)

Short-term

Turnover ratios

The activity ratios of California Resources Corp provide insight into the efficiency with which the company manages its assets and liabilities.

1. Inventory Turnover: The inventory turnover ratio indicates how quickly the company is selling its inventory. California Resources Corp's inventory turnover has been gradually decreasing from a high of 65.37 in March 2020 to 3.29 in December 2024. This suggests a slower rate of inventory turnover, which may indicate excess inventory or challenges in selling products.

2. Receivables Turnover: The receivables turnover ratio measures how efficiently the company is collecting payment from its customers. California Resources Corp's receivables turnover has fluctuated over the years, with a peak of 18.64 in March 2020 and a low of 5.16 in June 2021. A lower ratio may indicate potential issues with collecting payments from customers.

3. Payables Turnover: The payables turnover ratio assesses how quickly the company pays its suppliers. California Resources Corp's payables turnover has shown a declining trend, indicating a slowing rate of paying suppliers from 13.86 in March 2020 to 0.80 in December 2024. This may raise concerns about potential liquidity problems or strained supplier relationships.

4. Working Capital Turnover: The working capital turnover ratio evaluates the efficiency of the company in generating revenue from its working capital. California Resources Corp did not report working capital turnover until March 2023 when it showed a ratio of 14.03. This suggests that the company is effectively utilizing its working capital to generate revenue. However, the ratio fluctuated in subsequent periods, indicating potential changes in operating efficiency.

Overall, a comprehensive analysis of California Resources Corp's activity ratios reveals fluctuations and trends that can provide valuable insights into the company's operational efficiency and management of assets and liabilities.

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Average number of days

Based on the provided data for California Resources Corp, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days it takes for the company to turn its inventory into sales.
- The company has seen fluctuations in its inventory turnover over the years, ranging from as low as 5.58 days to as high as 110.98 days.
- A sudden increase in DOH, such as the significant jump from 11.22 days in December 2020 to 92.82 days in March 2021, indicates potential inventory management challenges or slower sales.
- Overall, the company's inventory turnover has improved since the peak in December 2024, showing better control over its inventory levels.

2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes for the company to collect payment after making a sale.
- California Resources Corp experienced fluctuations in DSO over the years, with a range from 19.58 days to 70.74 days.
- A decrease in DSO, like the drop from 67.71 days in September 2021 to 47.34 days in December 2021, indicates improved efficiency in collecting receivables.
- The downward trend in DSO from 72.93 days in December 2024 to 48.62 days in December 2024 suggests better credit management or more prompt collections.

3. Number of Days of Payables:
- This ratio illustrates how long it takes the company to pay its suppliers.
- California Resources Corp shows a wide range of days of payables, from as low as 18.29 days to as high as 455.02 days.
- A drastic increase in the number of days of payables, as seen in March 2021 jumping to 335.11 days, can indicate liquidity challenges or changes in payment terms.
- The trend of decreasing days of payables from 455.02 days in December 2024 may suggest a shift towards a more balanced approach in managing supplier payments.

In conclusion, while California Resources Corp has experienced fluctuations in its activity ratios over the years, the company has shown improvements in inventory turnover, receivables collection, and payables management, signaling potential enhancements in operational efficiency and working capital management.

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Long-term

The fixed asset turnover ratio for California Resources Corp has shown fluctuation over the years, with a general decreasing trend from 2020 to 2023. However, there was a significant improvement from March 31, 2023, to March 31, 2024. This ratio indicates the efficiency with which the company is utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio also exhibited variability but tended to increase from 2020 to 2023, except for a slight dip in March 31, 2022. This ratio signifies the company's ability to generate sales in relation to its total assets.

Overall, both ratios provide insights into California Resources Corp's operational efficiency and asset utilization over the analyzed period. Higher ratios generally indicate better operating performance and asset utilization, while lower ratios may suggest inefficiencies in these areas. It would be beneficial for the company to further analyze the factors influencing these ratios to improve its long-term activity efficiency.