National Fuel Gas Company (NFG)

Cash conversion cycle

		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	Dec 31, 2019
Days of inventory on hand (DOH)	days	38.39	84.87	68.24	62.04	53.38	37.56	29.80	41.53	51.16	38.64	45.75	74.48	109.08	84.99	72.56	86.25	124.09	91.30	86.80	192.38
Days of sales outstanding (DSO)	days	—	—	1.29	1.99	—	—	1.87	6.86	—	—	1.47	4.19	—	—	0.58	4.64	—	—	3.47	35.22
Number of days of payables	days	76.60	137.38	114.91	87.66	99.69	56.22	68.79	103.80	125.40	108.06	112.56	138.02	214.66	145.70	134.35	117.16	195.32	130.69	162.92	347.18
Cash conversion cycle	days	-38.21	-52.51	-45.38	-23.63	-46.31	-18.66	-37.12	-55.41	-74.24	-69.41	-65.34	-59.35	-105.58	-60.71	-61.20	-26.27	-71.23	-39.39	-72.65	-119.58

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 been fluctuating over the past few quarters. The company's average CCC is around -50 days, indicating that it takes less than two months for the company to convert its investments in inventory and other resources into cash inflows from sales.

A negative cash conversion cycle is generally considered a positive sign, as it suggests that the company is efficiently managing its working capital. National Fuel Gas Company has shown a consistent ability to convert its investments into cash quickly. This can be attributed to effective inventory management and collection practices, allowing the company to generate cash inflows before having to pay its suppliers.

However, there have been some periods where the cash conversion cycle has extended, particularly in the quarters ending in December 2021 and September 2020. This could indicate temporary disruptions or inefficiencies in the company's operations or supply chain. Management should monitor these fluctuations closely and take corrective actions if necessary to maintain a healthy cash conversion cycle.

Overall, National Fuel Gas Company's negative cash conversion cycle reflects its efficient working capital management, but attention should be given to any prolonged deviations from the average to ensure continued financial health and operational efficiency.