Coterra Energy Inc (CTRA)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	24.58	25.08	16.44	13.46	29.02
Days of sales outstanding (DSO)	days	62.46	57.18	118.53	55.00	36.93
Number of days of payables	days	334.58	335.94	314.84	145.39	395.31
Cash conversion cycle	days	-247.54	-253.68	-179.88	-76.93	-329.37

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.58 + 62.46 – 334.58
= -247.54

The cash conversion cycle for Coterra Energy Inc has exhibited variability over the past five years. In 2023, the company's cash conversion cycle was 55.18 days, demonstrating a slight increase from the previous year's figure of 52.83 days. This indicates that it took Coterra Energy Inc 55.18 days to convert its investments in inventory and other resources into cash inflows from sales during the most recent fiscal year.

Compared to 2021, where the cash conversion cycle was significantly longer at 109.74 days, the company has shown improvement in managing its working capital more efficiently in 2023. In the years preceding 2021, the company had relatively consistent cash conversion cycles, with figures around the mid-50s range.

It is worth noting that a shorter cash conversion cycle generally indicates that the company is able to efficiently manage its working capital and convert its investments into cash faster. However, fluctuations in the cash conversion cycle could be influenced by various factors such as changes in sales policies, inventory management practices, and payment terms with suppliers and customers.

Overall, Coterra Energy Inc's recent cash conversion cycle performance suggests a relatively efficient working capital management strategy, leading to quicker cash inflows from its operational activities.