Crescent Energy Co (CRGY)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 107.31 | 59.12 | — |
| Days of sales outstanding (DSO) | days | — | 44.22 | 63.47 |
| Number of days of payables | days | 141.62 | 153.13 | 366.90 |
| Cash conversion cycle | days | -34.31 | -49.79 | -303.43 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 107.31 + — – 141.62
= -34.31
The cash conversion cycle of Crescent Energy Co has shown a significant improvement over the past three years. In 2021, the company had a negative cash conversion cycle of -303.43 days, indicating that the company was able to convert its inventory and accounts receivables into cash much faster than paying its accounts payables. This signifies efficient liquidity management and a strong working capital position.
By the end of 2022, Crescent Energy Co further reduced its cash conversion cycle to -49.79 days, suggesting a more efficient management of its working capital and continued effectiveness in converting its assets into cash.
In 2023, the company improved its cash conversion cycle even further to -34.31 days, indicating that Crescent Energy Co continues to effectively manage its working capital and liquidity position. The negative cash conversion cycle suggests that the company is able to fund its operations using internal sources of funds before having to pay its suppliers, which is a favorable position.
Overall, the improving trend in Crescent Energy Co's cash conversion cycle over the past three years showcases the company's effective management of its working capital and liquidity position, which bodes well for its financial stability and operational efficiency.
Peer comparison
Dec 31, 2023