Crescent Energy Co (CRGY)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 24.26 | — | 83.84 | 112.13 | 113.51 | 199.51 | 45.88 | 61.77 | — | |||
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | 54.66 | 51.21 | 64.40 | |||
| Number of days of payables | days | — | — | 152.74 | 147.97 | — | — | 142.40 | 160.00 | 384.87 | |||
| Cash conversion cycle | days | 24.26 | 0.00 | -68.90 | -35.85 | 113.51 | 199.51 | -41.85 | -47.02 | -320.47 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.26 + — – —
= 24.26
The cash conversion cycle is a measure of how long it takes a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that the company is able to generate cash quickly from its operations, while a longer cycle may suggest inefficiencies in managing inventory, receivables, or payables.
Based on the data provided for Crescent Energy Co, the cash conversion cycle has shown some significant fluctuations over the past several quarters. In the most recent quarter ending September 30, 2024, the company's cash conversion cycle was 24.26 days, indicating that it took approximately 24 days to convert investments in inventory and other resources into cash flows. This represents an improvement compared to the previous quarter, where the company had a cash conversion cycle of 0.00 days, implying an instantaneous conversion of resources into cash.
Looking further back, the company experienced a negative cash conversion cycle in March 31, 2024, and December 31, 2023, indicating that the company was able to convert investments into cash before having to pay suppliers for inventory. This negative cycle suggests strong efficiency in managing cash flows and working capital.
However, in the quarters prior to that, Crescent Energy Co had significantly longer cash conversion cycles, particularly in June 30, 2023, and March 31, 2023, where the cycles were 199.51 days and 113.51 days, respectively. These longer cycles may indicate potential inefficiencies in managing working capital, potentially tied to issues such as slow inventory turnover or delays in collecting receivables.
Overall, the trend in Crescent Energy Co's cash conversion cycle shows variability, with periods of both efficiency and potential inefficiency in managing working capital. It is important for the company to monitor and address any factors contributing to prolonged cash conversion cycles to optimize cash flow generation and operational efficiency.
Peer comparison
Sep 30, 2024