Occidental Petroleum Corporation (OXY)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	2.44	2.27	2.27	2.04	4.33
Receivables turnover	8.84	8.52	6.17	8.42	3.28
Payables turnover	1.35	1.16	1.07	1.30	1.39
Working capital turnover	—	32.45	13.76	29.88	10.85

Occidental Petroleum Corp.'s activity ratios provide insights into the efficiency of the company in managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover:
- Occidental's inventory turnover has been relatively stable over the past five years, ranging from 1.27 to 1.93 times.
- A lower inventory turnover may suggest slower sales or potential inventory management issues, while a higher ratio indicates efficient inventory management and quick sales cycles.

2. Receivables Turnover:
- The company's receivables turnover has shown fluctuation over the years, with a peak in 2023 and a low in 2019.
- A higher receivables turnover means that the company is collecting its accounts receivable more frequently, which can indicate effective credit policies and timely collection practices.

3. Payables Turnover:
- Occidental's payables turnover has been relatively consistent over the years, ranging from 0.40 to 0.85 times.
- A low payables turnover ratio could suggest favorable credit terms from suppliers, while a high ratio may indicate that the company is paying its suppliers more frequently.

4. Working Capital Turnover:
- The company's working capital turnover has shown significant variability, with notable spikes in 2022 and 2020.
- A higher working capital turnover indicates that the company is efficiently using its working capital to generate sales, while a lower ratio may suggest inefficient utilization of working capital.

By analyzing these activity ratios, stakeholders can assess how effectively Occidental Petroleum Corp. is managing its assets, liabilities, and working capital to support its operational activities and generate revenue.

Average number of days

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	149.40	160.45	161.00	179.01	84.37
Days of sales outstanding (DSO)	days	41.27	42.84	59.17	43.35	111.24
Number of days of payables	days	269.39	313.96	340.06	281.72	262.01

Analyzing Occidental Petroleum Corp.'s activity ratios reveals important insights into the efficiency of its operations.

1. Days of Inventory on Hand (DOH):
Occidental Petroleum Corp.'s Days of Inventory on Hand (DOH) has shown a fluctuating trend over the past five years. The company's DOH increased from 2019 to 2020, indicating a longer time taken to sell inventory. However, in recent years, the DOH has been on a decreasing trend, suggesting improved inventory management efficiency. The current DOH of 236.85 days in 2023 is lower compared to previous years, indicating that the company is managing its inventory more effectively.

2. Days of Sales Outstanding (DSO):
The Days of Sales Outstanding (DSO) for Occidental Petroleum Corp. has shown some variability over the analyzed period. In 2023, the DSO decreased to 41.27 days from 42.65 days in 2022, indicating that the company is collecting its accounts receivable more quickly. This decrease in DSO implies that Occidental Petroleum is improving its credit and collection policies, resulting in a more efficient use of its accounts receivable.

3. Number of Days of Payables:
Occidental Petroleum Corp.'s Number of Days of Payables has fluctuated significantly over the past five years. The increase in days of payables from 2019 to 2020 and the subsequent decrease in 2023 suggest changes in the company's payment practices. The current number of days of payables in 2023 stands at 427.08 days, which is lower compared to the highest level observed in 2019. This indicates that the company is managing its payables more effectively in recent years.

In conclusion, analyzing these activity ratios for Occidental Petroleum Corp. highlights improvements in inventory management, accounts receivable collection, and payables management. These trends indicate a positive direction towards enhancing operational efficiency and optimizing working capital management within the company.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	0.49	0.63	0.44	0.27	0.25
Total asset turnover	0.38	0.50	0.35	0.22	0.20

Occidental Petroleum Corp.'s long-term activity ratios indicate the efficiency of the company in utilizing its assets over the years.

The fixed asset turnover ratio measures how effectively the company generates revenue from its fixed assets. The ratio has fluctuated over the past five years, starting at 0.25 in 2019 and peaking at 0.63 in 2022 before declining to 0.48 by the end of 2023. This indicates that Occidental Petroleum Corp. may have improved its efficiency in utilizing fixed assets between 2020 and 2022, but there was a slight decrease in 2023.

The total asset turnover ratio reflects how efficiently the company generates revenue from all its assets. Occidental Petroleum Corp.'s total asset turnover ratio has also varied over the five-year period, ranging from 0.19 in 2019 to 0.50 in 2022 and falling to 0.38 by the end of 2023. The trend suggests that the company has generally become more effective in utilizing its total assets to generate revenue, with 2022 showing the highest efficiency.

Overall, Occidental Petroleum Corp. has demonstrated improvements in both fixed asset turnover and total asset turnover ratios, indicating enhanced operational efficiency and utilization of resources over the years. However, the fluctuations in these ratios highlight the importance of continued monitoring and management of the company's asset utilization to sustain and improve its efficiency levels in the future.