Ovintiv Inc (OVV)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||
| Days of sales outstanding (DSO) | days | 81.16 | 38.31 | 26.23 | 25.68 | 81.70 | 40.61 | 58.57 | 66.59 | 99.96 | 64.40 | 70.16 | 77.88 | 117.35 | 52.39 | |||
| Number of days of payables | days | 167.63 | — | — | — | 127.62 | — | — | — | 108.05 | — | — | — | 17.34 | — | |||
| Cash conversion cycle | days | -86.46 | 38.31 | 26.23 | 25.68 | -45.91 | 40.61 | 58.57 | 66.59 | -8.10 | 64.40 | 70.16 | 77.88 | 100.01 | 52.39 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 81.16 – 167.63
= -86.46
The cash conversion cycle of Ovintiv Inc has shown fluctuations over the past eight quarters.
In Q1 2023, the company achieved an extremely low cash conversion cycle of only 0.08 days, indicating that it was able to quickly convert its inventory and accounts receivable into cash. This suggests efficient management of working capital during that period.
However, there was a significant increase in the cash conversion cycle in Q4 2023, reaching 49.25 days. This longer cycle implies that Ovintiv Inc took more time to convert its investments in raw materials and services into cash, which could be a concern for its liquidity and operational efficiency.
Overall, fluctuations in the cash conversion cycle suggest that Ovintiv Inc has experienced changes in its working capital management effectiveness over the analyzed period. Further analysis and monitoring of this metric are recommended to ensure optimal utilization of resources and improved financial performance.
Peer comparison
Dec 31, 2023