Murphy Oil Corporation (MUR)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 9.93 | 24.02 | 10.81 | 13.00 | 13.71 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 9.93 | 24.02 | 10.81 | 13.00 | 13.71 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 9.93 + — – —
= 9.93
The cash conversion cycle is a vital indicator of a company's efficiency in managing its working capital. Looking at the data provided for Murphy Oil Corporation, we can observe fluctuations in the cash conversion cycle over the years.
In December 31, 2020, the cash conversion cycle stood at 13.71 days, representing the time taken by the company to convert its investments in inventory and other resources into cash inflows from sales. Over the following years, there was a general trend of improvement in efficiency, with the cycle reducing to 13.00 days by December 31, 2021, and further declining to 10.81 days by December 31, 2022.
However, there was a significant spike in the cash conversion cycle to 24.02 days by December 31, 2023, indicating a potential delay in converting resources to cash during that period. Fortunately, the company managed to reverse this trend in the following year, achieving a notably lower cycle of 9.93 days by December 31, 2024.
Overall, the fluctuating nature of Murphy Oil Corporation's cash conversion cycle highlights the company's varying operational efficiency in managing working capital over the years. It is essential for the company to closely monitor and address factors leading to extended cash conversion cycles to optimize cash flow and enhance overall financial performance.
Peer comparison
Dec 31, 2024