Magnolia Oil & Gas Corp (MGY)

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	—	—	—	—	—	—	—	—	—	—	—	—	2.51	—	—	—	—	—	—	0.16
Days of sales outstanding (DSO)	days	41.02	37.90	49.47	57.79	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
Number of days of payables	days	692.33	642.06	912.84	935.23	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
Cash conversion cycle	days	-651.30	-604.16	-863.38	-877.44	-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

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 41.02 – 692.33
= -651.30

The cash conversion cycle of Magnolia Oil & Gas Corp demonstrates significant fluctuations over the period analyzed. Initially, the company's cash conversion cycle increased from 15.72 days on March 31, 2020, to 43.50 days on December 31, 2020, indicating a longer period required to convert its resources into cash.

However, starting from March 31, 2021, the cash conversion cycle turned negative and continued to decrease substantially over the following quarters. This suggests that Magnolia Oil & Gas Corp significantly improved its efficiency in managing its cash flow, as negative days indicate that the company was able to convert its invested resources into cash at a faster rate than it took to initially invest them.

The company continued to exhibit strong cash conversion performance with consistently negative cash conversion cycle days through the end of 2024. This trend indicates that Magnolia Oil & Gas Corp has been successful in efficiently managing its working capital, improving liquidity, and potentially enhancing profitability by reducing the time taken to convert investments into cash.