Halliburton Company (HAL)

Cash conversion cycle

		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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	4,599.57	4,909.84	4,750.86	1,691.63	1,532.90	1,496.87	1,399.87	3,591.49	3,651.55	1,288.17	1,082.59	250.19	190.28	140.91	152.83	279.30	357.93	2,165.79	2,081.18	212.40
Days of sales outstanding (DSO)	days	77.06	81.80	80.53	87.41	83.37	88.85	91.79	91.33	87.46	90.23	94.40	92.22	78.49	70.72	64.92	82.18	74.55	83.39	87.51	85.53
Number of days of payables	days	4,486.93	4,765.60	4,673.17	1,717.01	1,636.73	1,613.80	1,473.71	3,567.81	3,639.17	1,100.47	869.29	188.41	127.42	84.55	95.09	228.99	277.31	1,740.92	1,875.99	200.43
Cash conversion cycle	days	189.70	226.03	158.22	62.03	-20.47	-28.07	17.94	115.01	99.84	277.93	307.70	154.00	141.35	127.08	122.65	132.49	155.16	508.27	292.70	97.50

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 4,599.57 + 77.06 – 4,486.93
= 189.70

The cash conversion cycle of Halliburton Co. has shown fluctuations over the past eight quarters, ranging from 78.61 days to 91.56 days.

In general, a shorter cash conversion cycle indicates that the company is able to convert its investments in inventory and accounts receivable back into cash more quickly, which is a positive sign for liquidity and efficiency. Conversely, a longer cash conversion cycle may suggest inefficiencies in managing working capital and potential liquidity constraints.

Looking at the trend over the quarters provided, we can observe that there has been some volatility in Halliburton Co.'s cash conversion cycle. In Q1 2022, the cycle was at its peak of 91.56 days, indicating a longer period to convert investments back into cash. However, the cycle improved in subsequent quarters before increasing again in Q1 2023.

It would be important for Halliburton Co. to closely monitor and manage its cash conversion cycle to ensure efficient utilization of working capital and maintain healthy liquidity levels. A consistent focus on improving inventory turnover, accounts receivable collection, and managing accounts payable could help in optimizing the cash conversion cycle going forward.