Murphy Oil Corporation (MUR)
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 | 91.76 | 84.58 | 76.70 | 68.72 | 56.08 | 70.70 | 101.32 | 117.23 | 62.41 | 61.21 | 36.81 | 38.23 | 16.76 | 16.62 | 16.87 | 19.97 | 88.07 | 64.77 | 53.63 | 38.74 |
| Days of sales outstanding (DSO) | days | 36.29 | 46.82 | 38.03 | 34.15 | 36.30 | 38.03 | 63.01 | 54.90 | 40.98 | 36.04 | 79.56 | 75.74 | 48.61 | 44.79 | 50.93 | 68.08 | 55.05 | 62.64 | 65.62 | 63.38 |
| Number of days of payables | days | 753.03 | 629.74 | 717.44 | 559.03 | 559.42 | 716.19 | 1,443.25 | 1,856.94 | 717.54 | 656.17 | 479.54 | 309.12 | 103.27 | 72.37 | 103.42 | 162.02 | 696.60 | 469.22 | 370.21 | 238.42 |
| Cash conversion cycle | days | -624.99 | -498.34 | -602.70 | -456.16 | -467.03 | -607.46 | -1,278.92 | -1,684.81 | -614.15 | -558.92 | -363.18 | -195.14 | -37.89 | -10.95 | -35.62 | -73.98 | -553.48 | -341.81 | -250.96 | -136.30 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 91.76 + 36.29 – 753.03
= -624.99
The cash conversion cycle of Murphy Oil Corp. has shown significant fluctuations over the past eight quarters. A negative cash conversion cycle indicates that the company is able to generate cash from its operating activities before having to pay its suppliers.
From Q1 2022 to Q4 2023, there was a notable improvement in the cash conversion cycle, with the company moving from an exceptionally high cycle of -9,492.15 days to -2,735.15 days. This indicates that the company has been able to more efficiently convert its inventory into cash during this period.
However, it is important to note that a negative cash conversion cycle may not always be sustainable in the long term as it may indicate aggressive payment terms with suppliers or inefficient management of inventory levels. Therefore, it would be crucial for Murphy Oil Corp. to closely monitor and manage its cash conversion cycle to ensure consistent and sustainable cash flow generation.
Peer comparison
Dec 31, 2023