Hess Corporation (HES)

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	196.39	182.77	153.98	128.99	133.79	209.22	255.42	200.21	191.07	241.49	204.57	185.03	52.78	57.93	48.03	30.68	173.52	184.74	192.91	176.70
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	259.70	233.82	193.85	193.77	175.72	241.58	289.26	257.07	188.50	193.56	151.09	145.32	27.93	27.45	40.96	57.50	273.25	253.13	244.95	257.31
Cash conversion cycle	days	-63.31	-51.05	-39.88	-64.78	-41.93	-32.36	-33.84	-56.85	2.57	47.93	53.48	39.71	24.85	30.47	7.07	-26.81	-99.73	-68.40	-52.04	-80.61

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 196.39 + — – 259.70
= -63.31

The cash conversion cycle of Hess Corporation fluctuated over the past eight quarters, indicating various trends in efficiency of managing working capital. In Q2 2022, the company had the longest cash conversion cycle of 70.19 days, reflecting a delay in converting inventory and receivables into cash. Subsequently, there was a notable improvement in Q3 2022 when the cycle decreased to 47.08 days, suggesting enhanced operational efficiency.

However, in Q4 2022, the cycle slightly increased to 37.45 days compared to the previous quarter, indicating potential challenges in managing cash flow. This trend continued in Q1 2023, as the cycle extended to 38.62 days, signifying a longer period to convert inputs into cash.

Nonetheless, Hess Corporation saw a significant improvement in Q2 2023 with a cash conversion cycle of 34.64 days, reflecting better control over working capital components. The positive trend continued in Q3 2023 with a further decrease to 31.16 days, indicating efficient management of inventory, payables, and receivables.

Overall, Hess Corporation's cash conversion cycle has shown fluctuations over the quarters, with some periods of improvement and others of potential challenges in converting operational activities into cash inflows. Monitoring and managing the cash conversion cycle effectively is crucial for optimizing working capital and enhancing overall financial performance.