Coterra Energy Inc (CTRA)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 17.29 | 24.58 | 25.08 | 16.44 | 13.46 |
| Days of sales outstanding (DSO) | days | 73.83 | 62.46 | 57.18 | 118.53 | 55.00 |
| Number of days of payables | days | 313.13 | 334.58 | 335.94 | 314.84 | 145.39 |
| Cash conversion cycle | days | -222.00 | -247.54 | -253.68 | -179.88 | -76.93 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 17.29 + 73.83 – 313.13
= -222.00
The cash conversion cycle of Coterra Energy Inc has exhibited a declining trend over the past five years. From -76.93 days in December 2020, the cycle decreased to -179.88 days by December 2021. This trend continued, reaching -253.68 days by December 2022. However, there was a slight decrease in the cycle to -247.54 days by December 2023, followed by a further reduction to -222.00 days by December 2024.
A negative cash conversion cycle indicates that Coterra Energy Inc has been efficiently managing its working capital, as it takes fewer days to convert its resources into cash. This could imply effective inventory management, prompt receivables collection, and extended payables period, all contributing to a more streamlined cash flow process. It suggests that the company is able to operate with minimal reliance on external financing for its day-to-day operations, potentially enhancing its financial stability and liquidity position.
Peer comparison
Dec 31, 2024