Coterra Energy Inc (CTRA)

Short-term

Turnover ratios

The activity ratios for Coterra Energy Inc reveal the following trends:

1. Inventory turnover: The inventory turnover ratio is consistently at 0.00 across all years, indicating that Coterra Energy Inc is not effectively managing its inventory levels or experiencing issues with selling its inventory. This may lead to inefficiencies in the company's operations and potential liquidity challenges.

2. Receivables turnover: The receivables turnover ratio has fluctuated over the years, ranging from 3.33 to 6.91. A higher turnover ratio indicates that the company is collecting its accounts receivable more efficiently. In general, Coterra Energy Inc has shown a good ability to convert its credit sales into cash in a timely manner, although there was a slight dip in 2021.

3. Payables turnover: The payables turnover ratio is consistently at 0.00 for all years, suggesting that the company is not effectively managing its accounts payable. This may indicate that Coterra Energy Inc is not leveraging its trade credit effectively or may be missing out on opportunities for better cash flow management.

4. Working capital turnover: The working capital turnover ratio has also varied significantly over the years, with a peak in 2020 at 57.54 and a notable increase in 2023 to 16.66. A higher working capital turnover ratio indicates that the company is generating more revenue for every dollar of working capital invested. Coterra Energy Inc's recent improvement in this ratio suggests better efficiency in utilizing its working capital to drive revenue growth.

In conclusion, while Coterra Energy Inc has shown strength in managing its receivables and working capital turnover, there are areas of concern such as the inventory turnover and payables turnover ratios that require attention to improve operational efficiency and cash flow management. Monitoring and addressing these ratios can help enhance the company's overall financial performance and sustainability.

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Average number of days

Days of sales outstanding (DSO) measures the average number of days it takes for Coterra Energy Inc to collect payment after making a sale. The trend shows that DSO has been relatively stable over the past five years, ranging from around 53 to 110 days. In 2023, DSO decreased slightly to 55.18 days compared to the previous year, which indicates an improvement in the company's accounts receivable collection efficiency.

Days of inventory on hand (DOH) is not available for analysis in the data provided. This ratio typically indicates how well Coterra Energy is managing its inventory levels, but without specific values, it is difficult to assess the company's inventory turnover.

Number of days of payables is also not provided in the data, making it impossible to analyze Coterra Energy's payment terms with its suppliers and the efficiency of managing its accounts payable.

In summary, Coterra Energy Inc has shown improvement in its days of sales outstanding, reflecting better efficiency in collecting receivables, but without information on inventory and payables turnover, a comprehensive analysis of the company's working capital management is limited.

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Long-term

The long-term activity ratios of Coterra Energy Inc, as indicated by the fixed asset turnover and total asset turnover ratios, show a declining trend over the past five years. Both ratios measure the efficiency of the company in generating sales revenue from its assets.

The fixed asset turnover ratio has decreased from 0.54 in 2019 to 0.33 in 2023, indicating that the company is generating less revenue per dollar of fixed assets invested. This decline suggests potential underutilization of fixed assets or a decrease in sales relative to the value of fixed assets held by the company.

Similarly, the total asset turnover ratio has also shown a decreasing trend from 0.46 in 2019 to 0.29 in 2023. This indicates that Coterra Energy Inc is generating less revenue per dollar of total assets, which may suggest inefficiencies in utilizing all assets to generate sales or an increase in the asset base without a proportional increase in revenue.

Overall, the declining trend in both fixed asset turnover and total asset turnover ratios for Coterra Energy Inc indicates a potential inefficiency in utilizing assets to generate sales revenue over the past five years. It may be prudent for the company to assess and improve its asset utilization strategies to enhance long-term operational efficiency and profitability.