Coterra Energy Inc (CTRA)

Cash conversion cycle

		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	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	24.81	27.32	27.46	23.25	25.78	15.39	13.84	14.26	16.48	10.59	15.93	14.48	13.53	30.02	37.51	38.06	29.26	37.49	39.89	38.51
Days of sales outstanding (DSO)	days	62.46	41.05	29.25	30.92	57.18	65.49	94.36	91.02	118.53	73.93	48.88	47.49	54.97	72.83	61.98	58.90	36.92	25.04	27.46	34.19
Number of days of payables	days	337.67	274.50	264.46	345.90	345.36	272.70	314.06	303.96	315.69	188.18	152.21	154.27	146.15	304.97	337.89	383.35	398.71	355.87	380.67	430.93
Cash conversion cycle	days	-250.40	-206.13	-207.75	-291.73	-262.40	-191.82	-205.86	-198.69	-180.68	-103.66	-87.41	-92.30	-77.64	-202.12	-238.40	-286.39	-332.52	-293.34	-313.32	-358.24

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.81 + 62.46 – 337.67
= -250.40

The cash conversion cycle of Coterra Energy Inc has fluctuated over the quarters, indicating variability in its operational efficiency and liquidity management.

In Q4 2023, the cash conversion cycle increased to 55.18 days from 41.05 days in Q3 2023, suggesting that the company took longer to convert its investments in inventory or accounts receivable into cash. This may raise concerns about the company's working capital management.

By comparing to previous quarters, the trend shows an improvement from Q2 2023 to Q3 2023 and a slight deterioration from Q1 2023 to Q2 2023 but still better than the performance in Q1 2023. However, these fluctuations can be indicative of the company's ability to efficiently manage its receivables, inventory, and payables, impacting its overall cash flow.

Notably, the negative cash conversion cycle figures in Q2 2022, Q3 2022, and Q4 2022 are unusual and may be attributed to abnormal circumstances like extensive trade payables exceeding the sum of inventory and receivables. This could potentially be a result of errors in data recording or anomalies in the company's operations during those periods.

Overall, the analysis of Coterra Energy Inc's cash conversion cycle highlights the importance of closely monitoring working capital efficiency and the management of the company's cash flow to ensure sustainable financial health and operational success.