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.
Peer comparison
Sep 30, 2024