California Resources Corp (CRC)

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	110.98	67.10	58.74	74.93	74.66	73.62	73.21	70.57	70.65	69.24	62.85	63.09	69.30	87.60	94.09	92.82	11.22	5.69	5.69	5.58
Days of sales outstanding (DSO)	days	48.62	43.00	41.35	42.86	30.62	35.88	23.04	28.46	49.75	44.06	58.48	65.43	47.34	67.71	70.74	61.14	45.82	30.29	22.51	19.58
Number of days of payables	days	455.02	314.01	260.11	268.67	254.05	232.27	218.58	286.71	406.21	357.96	319.79	323.32	307.25	378.14	402.31	335.11	39.00	20.63	18.29	26.34
Cash conversion cycle	days	-295.42	-203.91	-160.03	-150.87	-148.77	-122.77	-122.32	-187.67	-285.81	-244.65	-198.45	-194.80	-190.60	-222.83	-237.48	-181.15	18.04	15.35	9.92	-1.18

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 110.98 + 48.62 – 455.02
= -295.42

The cash conversion cycle, a measure of how efficiently a company manages its cash flow, indicates the amount of time it takes for a company to convert its investments in inventory and accounts receivable into cash receipts from customers.

In the case of California Resources Corp, the cash conversion cycle fluctuated significantly over the analyzed period, ranging from negative values to positive values. A negative cash conversion cycle typically indicates that the company is able to generate cash from sales before it needs to pay its suppliers, potentially signaling strong liquidity and working capital management.

From March 31, 2020, to December 31, 2024, the cash conversion cycle for California Resources Corp varied widely, starting at -1.18 days and reaching as low as -295.42 days by the end of December 2024. The negative values observed throughout the period suggest that the company was able to efficiently convert its investments into cash inflows within a very short timeframe, often significantly before having to settle its payables.

This trend of consistently negative cash conversion cycle values indicates that California Resources Corp has been effectively managing its cash flow and working capital during the period under review, potentially allowing the company to operate with lower financing needs and enhancing its overall financial performance.