EQT Corporation (EQT)

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	136.12	105.79	78.78	80.57	92.43
Days of sales outstanding (DSO)	days	48.35	78.28	171.27	67.60	75.12
Number of days of payables	days	176.99	205.06	194.19	107.83	90.59
Cash conversion cycle	days	7.47	-20.98	55.86	40.34	76.97

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 136.12 + 48.35 – 176.99
= 7.47

The cash conversion cycle of EQT Corp has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 48.35 days, reflecting a more efficient management of cash flows compared to the previous year. This improvement suggests better control over inventory, accounts receivable, and accounts payable.

In 2022, there was a notable increase in the cash conversion cycle to 78.28 days, indicating a slower conversion of investments in raw materials into cash. This could be attributed to delays in collecting receivables or managing inventory levels effectively.

The significant decline in the cash conversion cycle to 171.27 days in 2021 raises concerns about the company's ability to efficiently convert investments into cash. A longer cash conversion cycle may suggest issues with inventory management, slow collections from customers, or extended payment terms to suppliers.

In 2020, the cash conversion cycle decreased to 67.60 days, suggesting a temporary improvement in converting investments into cash compared to the previous year. However, the company experienced a similar level of efficiency in 2019, with a cash conversion cycle of 75.12 days.

Overall, EQT Corp should focus on maintaining a sustainable and efficient cash conversion cycle to optimize working capital management and enhance liquidity in the long run.