Halliburton Company (HAL)

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	2,830.61	3,035.96	4,420.41	4,521.56	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
Days of sales outstanding (DSO)	days	81.39	84.45	83.87	80.47	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
Number of days of payables	days	2,969.35	2,860.12	4,437.92	4,291.18	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
Cash conversion cycle	days	-57.35	260.30	66.36	310.85	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

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 2,830.61 + 81.39 – 2,969.35
= -57.35

The cash conversion cycle (CCC) is a key indicator of a company's efficiency in managing its cash inflows and outflows related to its operations. It represents the time it takes for a company to convert its investments in raw materials into cash received from sales of the final product.

Analyzing Halliburton Company's CCC data over the specified periods, we observe fluctuations in the efficiency of its cash conversion cycle.

- From March 31, 2020, to December 31, 2020, there was an increase in the CCC from 132.49 days to 141.35 days, indicating a slowdown in the conversion of investments into cash.
- Subsequently, there was a significant jump in the CCC to 307.70 days by June 30, 2021, suggesting an extended period between investing in resources and realizing cash from sales.
- However, there was a marked improvement by December 31, 2021, with the CCC dropping to 99.84 days, indicating an enhanced efficiency in cash conversion.
- The trend continued positively, with the CCC further decreasing to 17.94 days by June 30, 2022, and turning negative by September 30, 2022, and December 31, 2022. A negative CCC implies that the company is receiving cash from sales before having to pay its suppliers, a favorable position from a liquidity standpoint.
- By March 31, 2023, the CCC increased to 62.03 days, signifying a change in the cash cycle efficiency.
- The CCC continued to fluctuate over the subsequent periods, reaching a peak of 310.85 days by March 31, 2024, before dropping significantly to 66.36 days by June 30, 2024, and then fluctuating again.

Overall, the analysis of Halliburton Company's cash conversion cycle demonstrates fluctuations in the efficiency of cash management and working capital over the specified periods. These variations can be attributed to changes in the company's operational performance, inventory management, payment terms with suppliers, and collection timeframe from customers. Monitoring and optimizing the CCC is vital for maintaining healthy cash flows and operational efficiency within the company.