Northern Oil & Gas Inc (NOG)

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	—	28.95	9.44	13.86	6.63
Days of sales outstanding (DSO)	days	62.98	63.14	142.18	46.94	83.82
Number of days of payables	days	80.05	84.09	69.95	9.59	70.57
Cash conversion cycle	days	-17.07	8.00	81.67	51.21	19.89

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 62.98 – 80.05
= -17.07

The cash conversion cycle of Northern Oil and Gas Inc. has fluctuated over the past five years, indicating varying efficiency in managing its working capital.

In 2023, the company's cash conversion cycle was 62.98 days, showing a slight improvement compared to 2022 when it was 63.14 days. This could suggest that the company was more effective in converting its investments in inventory and receivables into cash during the most recent year.

However, in 2021, the cash conversion cycle significantly increased to 142.18 days, indicating that the company took much longer to convert its investments in inventory and receivables into cash. This prolonged cycle suggests potential issues with managing working capital efficiently during that period.

In 2020, the cash conversion cycle was 46.94 days, reflecting a shorter period compared to the preceding years, implying that the company was relatively better at managing its working capital during this period.

Similarly, in 2019, the cash conversion cycle was 83.82 days, indicating a longer cycle compared to 2020 but shorter than in 2021. This suggests some fluctuations in the efficiency of working capital management during that year.

Overall, the trend in Northern Oil and Gas Inc.'s cash conversion cycle shows fluctuations over the five-year period, indicating potential challenges in effectively managing working capital to convert investments into cash efficiently.