Chevron Corp (CVX)

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	24.77	26.01	24.32	22.65	19.79	22.79	21.75	21.55	25.91	26.28	30.35	32.07	33.76	27.80	24.82	26.02	22.07	23.87	25.91	24.60
Days of sales outstanding (DSO)	days	36.18	38.18	31.59	28.61	30.32	34.47	45.39	45.93	41.38	43.32	48.04	54.12	44.22	33.54	26.63	25.98	33.20	31.03	32.73	33.27
Number of days of payables	days	58.74	59.73	49.33	44.03	45.49	54.92	70.22	66.51	62.74	65.64	71.60	73.36	65.13	46.67	37.15	43.56	53.22	53.06	56.34	52.06
Cash conversion cycle	days	2.22	4.46	6.58	7.24	4.62	2.33	-3.07	0.97	4.55	3.96	6.79	12.82	12.85	14.67	14.30	8.44	2.04	1.84	2.30	5.81

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.77 + 36.18 – 58.74
= 2.22

The cash conversion cycle (CCC) of Chevron Corp. shows fluctuations over the past eight quarters. In Q1 2022 and Q4 2022, the CCC was relatively stable at 0.43 days and 4.80 days, respectively. However, in Q2 2022, there was a significant decrease to -3.10 days, indicating a negative cycle, which could suggest effective cash flow management or potentially aggressive short-term creditor terms. Subsequently, in Q3 2022 and Q1 2023, the CCC increased to 2.55 days and 7.53 days, indicating a lengthening of the cycle, possibly due to slower collection of receivables or inventory management issues.

In Q2 2023 and Q3 2023, the CCC continued to rise to 6.56 days and 4.07 days, respectively, suggesting a prolonged conversion of cash invested in operations back into cash. However, in Q4 2023, there was a notable decrease to 0.76 days, indicating an improvement in the company's efficiency in managing working capital and converting it into cash.

Overall, Chevron Corp.'s cash conversion cycle has shown variability over the past eight quarters, which could be reflective of changing operational efficiencies, economic conditions, or strategic business decisions. Monitoring the CCC can help assess the company's liquidity, operational efficiency, and potential cash flow problems.