Expand Energy Corporation (EXE)

Cash conversion cycle

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	22.78	25.32	17.82	24.82	22.94	19.52	22.24	44.70	59.92	78.10	90.08	73.34	79.92	64.88	71.26	51.85	41.69	26.58	31.17	42.04
Number of days of payables	days	467.77	510.26	723.16	1,048.14	1,231.88	1,370.35	1,331.30	1,342.04	1,395.28	1,153.51	1,042.06	936.83	582.64	486.09	399.65	14.20	12.94	1.60	22.73	486.02
Cash conversion cycle	days	-444.99	-484.94	-705.34	-1,023.32	-1,208.93	-1,350.83	-1,309.06	-1,297.35	-1,335.37	-1,075.41	-951.98	-863.49	-502.72	-421.21	-328.39	37.66	28.75	24.98	8.43	-443.97

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 22.78 – 467.77
= -444.99

The cash conversion cycle of Expand Energy Corporation has shown significant fluctuations over the past few quarters. A negative cash conversion cycle indicates that the company is efficiently managing its working capital, specifically its cash, inventory, and accounts receivable.

In the most recent quarter, as of September 30, 2024, the cash conversion cycle improved to -444.99 days compared to the previous quarter. This signals that Expand Energy is able to convert its investments in inventory and receivables back into cash relatively quickly.

However, it is worth noting that the cash conversion cycle has been consistently negative for several quarters, which may indicate that the company could potentially be too aggressive in managing its working capital, possibly sacrificing sales growth. The extreme negative values seen in some quarters, such as -1,208.93 days in December 31, 2023, and -1,350.83 days in June 30, 2023, suggest that there may have been excessive liquidity tied up in the company's operations.

Overall, while a negative cash conversion cycle generally signals efficiency, it is important for Expand Energy to strike a balance to ensure optimal working capital management without compromising growth opportunities or financial stability. Regular monitoring and adjustment of operating cycles will be essential for sustainable performance in the future.