National Fuel Gas Company (NFG)

Cash conversion cycle

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Days of inventory on hand (DOH)	days	38.39	53.38	51.16	109.08	90.70
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	76.60	99.69	125.40	214.66	142.76
Cash conversion cycle	days	-38.21	-46.31	-74.24	-105.58	-52.06

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 38.39 + — – 76.60
= -38.21

The cash conversion cycle of National Fuel Gas Company has fluctuated over the past five years, reflecting the company's efficiency in managing its working capital. A negative cash conversion cycle indicates that the company is able to generate cash from its operations before paying its suppliers, which is generally a desirable scenario.

In 2024, the cash conversion cycle improved to -38.21 days, a significant decrease from the previous year. This suggests that the company has become more efficient in converting its inventory into sales and collecting cash from customers, leading to improved liquidity and working capital management.

In 2023, the cash conversion cycle was -46.31 days, indicating a slight deterioration compared to the previous year. Despite this, the company still managed to operate with a negative cash conversion cycle, which implies effective management of its operating cycle.

In 2022, the cash conversion cycle further decreased to -74.24 days, showcasing a notable improvement from the prior year. This suggests that the company may have enhanced its inventory management and accounts receivable collection processes, resulting in a shorter cash conversion cycle.

In 2021, the cash conversion cycle was -105.58 days, the most significant improvement over the five-year period. A substantial negative cash conversion cycle indicates that the company is efficient in managing its working capital and converting sales into cash quickly.

In 2020, the cash conversion cycle was -52.06 days, representing a decrease from the prior year. While still negative, this indicates that the company was able to maintain an efficient cash conversion cycle despite some fluctuation in performance.

Overall, the trend of the cash conversion cycle for National Fuel Gas Company shows a mix of improvements and fluctuations over the years, with the company generally operating with a negative cash conversion cycle, reflecting effective management of its working capital and operating efficiency.