Magnolia Oil & Gas Corp (MGY)

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	—	—	—	—	—	—	—	—	2.51	—	—	—	—	—	—	0.16	—	7.92	—	56.61
Days of sales outstanding (DSO)	days	56.43	54.39	35.30	34.04	36.78	45.19	61.03	52.58	50.69	52.63	58.95	68.78	55.00	36.00	29.66	31.36	40.98	45.81	51.78	46.01
Number of days of payables	days	869.13	853.10	771.60	888.11	978.43	1,059.16	980.67	587.86	521.33	405.98	328.47	301.27	11.49	11.66	11.85	15.80	327.54	—	—	—
Cash conversion cycle	days	-812.70	-798.71	-736.30	-854.07	-941.65	-1,013.97	-919.65	-535.28	-468.13	-353.34	-269.52	-232.49	43.50	24.34	17.82	15.72	-286.56	53.72	51.78	102.62

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 56.43 – 869.13
= -812.70

The cash conversion cycle of Magnolia Oil & Gas Corp has exhibited fluctuations over the past few years. The company's cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has been predominantly negative in recent quarters, indicating efficient management of working capital.

The trend shows that the cash conversion cycle was significantly negative in the recent quarters, reaching a low of -1,013.97 days in Sep 2022. This suggests that the company is able to collect cash from its sales and convert its inventory into sales revenue at a faster rate than it takes to pay off its accounts payable. However, the cash conversion cycle has been gradually improving since then, with the latest figure standing at -812.70 days as of Dec 31, 2023.

The positive cash conversion cycle implies that Magnolia Oil & Gas Corp has been successful in managing its working capital effectively, ensuring that it can generate cash quickly from its operational activities. The company's ability to efficiently convert its investments into cash flows is crucial for its overall financial health and liquidity.

Overall, the negative cash conversion cycle indicates that Magnolia Oil & Gas Corp has been performing well in terms of managing its working capital and generating cash flows from its operations efficiently.