Marathon Oil Corporation (MRO)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 189.11 | 143.93 | 53.74 | 30.05 | 50.34 |
| Days of sales outstanding (DSO) | days | 62.79 | 52.05 | 76.24 | 88.35 | 78.91 |
| Number of days of payables | days | 1,386.80 | 1,472.67 | 774.67 | 330.99 | 913.90 |
| Cash conversion cycle | days | -1,134.90 | -1,276.69 | -644.68 | -212.58 | -784.65 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 189.11 + 62.79 – 1,386.80
= -1,134.90
The cash conversion cycle for Marathon Oil Corporation has shown fluctuations over the past five years. The trend indicates an improvement in the efficiency of the company's cash conversion cycle as it has decreased from -552.22 days in 2019 to -453.66 days in 2023.
A negative cash conversion cycle, as seen in all the years in the table, suggests that Marathon Oil Corporation is able to generate cash from its operating activities before having to pay its current liabilities. This could be attributed to the company's effective management of its working capital, including inventory, accounts receivable, and accounts payable.
The company appears to be able to efficiently convert its resources into cash, allowing it to operate with a shorter cash conversion cycle compared to previous years. This improvement indicates that Marathon Oil Corporation has been successful in managing its working capital and optimizing its cash flow processes.
Overall, the decreasing trend in the cash conversion cycle is a positive indication of Marathon Oil Corporation's financial health and operational efficiency in managing its cash flows.
Peer comparison
Dec 31, 2023