Diamondback Energy Inc (FANG)
Cash conversion cycle
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 14.57 | 12.93 | 5.85 | 6.89 | 8.22 | 10.07 | 7.73 | 8.34 | 8.40 | 9.74 | 10.92 | 10.76 | 11.86 | 8.18 | 5.58 | 9.42 | 5.55 | 5.10 | 5.03 | 5.23 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 14.57 | 12.93 | 5.85 | 6.89 | 8.22 | 10.07 | 7.73 | 8.34 | 8.40 | 9.74 | 10.92 | 10.76 | 11.86 | 8.18 | 5.58 | 9.42 | 5.55 | 5.10 | 5.03 | 5.23 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 14.57 + — – —
= 14.57
The cash conversion cycle for Diamondback Energy Inc has shown fluctuations over the periods analyzed. It measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 5.03 days to a high of 14.57 days. Overall, the cycle seemed to exhibit some volatility, with periods of both shorter and longer cycles observed.
The company managed to keep its cash conversion cycle relatively low in the earlier periods, indicating efficient management of working capital. However, there was a noticeable increase towards the end of the analyzed period, with the cycle peaking at 14.57 days on December 31, 2024.
The trends in the cash conversion cycle suggest that Diamondback Energy Inc may have experienced challenges in converting its investments into cash efficiently in the latter periods. This could be a result of various factors such as changes in sales patterns, inventory management issues, or extended payment terms with customers.
Further analysis of the company's operational and financial strategies during these periods may provide insights into the reasons behind the fluctuations in the cash conversion cycle and could help in identifying areas for improvement to enhance the company's overall financial performance.
Peer comparison
Dec 31, 2024
See also:
Diamondback Energy Inc Cash Conversion Cycle (Quarterly Data)