EOG Resources Inc (EOG)
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 | 501.48 | 374.56 | 219.75 | 86.58 | 263.28 |
| Days of sales outstanding (DSO) | days | 40.99 | 40.77 | 45.72 | 50.36 | 42.04 |
| Number of days of payables | days | 958.52 | 896.39 | 843.64 | 231.39 | 833.49 |
| Cash conversion cycle | days | -416.05 | -481.06 | -578.17 | -94.45 | -528.18 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 501.48 + 40.99 – 958.52
= -416.05
The cash conversion cycle of EOG Resources, Inc. has fluctuated over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In 2023, the cash conversion cycle improved to 41.15 days from 40.89 days in 2022, indicating that the company was able to manage its working capital more efficiently. However, compared to 2020 (50.91 days), the cycle has decreased significantly, reflecting better efficiency in managing inventory, accounts receivable, and accounts payable.
Overall, EOG Resources, Inc. has shown variations in its cash conversion cycle performance, with some years demonstrating better working capital management than others. It is crucial for the company to continue monitoring and optimizing its working capital to maintain a healthy cash conversion cycle and improve its overall financial health.
Peer comparison
Dec 31, 2023