Occidental Petroleum Corporation (OXY)

Short-term

Turnover ratios

The analysis of Occidental Petroleum Corporation's activity ratios reveals the following trends:

1. Inventory Turnover: Occidental's inventory turnover ratio has varied over the years, ranging from a low of 5.07 to a high of 12.90. Generally, a higher turnover ratio indicates more efficient management of inventory, with the company selling through its inventory quicker. The latest value of 8.20 suggests that the company is able to turn over its inventory approximately 8.20 times a year.

2. Receivables Turnover: The data for receivables turnover is missing for all periods, indicating that this ratio could not be calculated. Receivables turnover measures how efficiently a company collects on credit sales, so the absence of this data makes it challenging to assess Occidental's effectiveness in collecting payments from customers.

3. Payables Turnover: Similar to receivables turnover, payables turnover data is also missing, making it impossible to evaluate how effectively Occidental is managing its payments to suppliers.

4. Working Capital Turnover: The working capital turnover ratio shows how effectively the company is using its working capital to generate sales. Occidental's working capital turnover varied significantly, with values ranging from 5.99 to 2,087.46. A higher turnover ratio indicates that the company is efficiently utilizing its working capital. The inconsistent values suggest varying levels of efficiency in utilizing working capital to generate revenue.

Overall, while the inventory turnover ratio provides some insight into Occidental's management of inventory levels, the missing data for receivables and payables turnover ratios limits a comprehensive assessment of the company's overall efficiency in managing its assets and liabilities.

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Average number of days

Based on the provided data, let's analyze the activity ratios of Occidental Petroleum Corporation:

1. Days of Inventory on Hand (DOH):
- The DOH ratio measures how many days, on average, a company holds onto its inventory before selling it.
- Occidental Petroleum Corporation's DOH fluctuated over the periods provided, ranging from a low of 28.29 days on March 31, 2022, to a high of 71.98 days on June 30, 2024.
- Generally, a lower DOH indicates efficient inventory management, while a higher DOH could suggest potential issues such as slow-moving inventory or overstocking.

2. Days of Sales Outstanding (DSO):
- Unfortunately, DSO data is not available in the provided dataset. DSO calculates how long it takes for a company to collect its accounts receivable.
- Ideally, a lower DSO indicates that the company is collecting payments from customers quickly, which is better for cash flow and liquidity.

3. Number of Days of Payables:
- Similarly, information on the number of days of payables is not provided in the dataset. This ratio helps in understanding the average number of days a company takes to pay its suppliers.
- A longer period suggests the company is using supplier financing effectively, while a very short period could indicate strong bargaining power with suppliers.

In conclusion, the analysis of Occidental Petroleum Corporation's activity ratios based on the available data reflects varying levels of efficiency and management in inventory holding. Unfortunately, without data on DSO and payables, a comprehensive assessment of the company's overall working capital management and cash conversion cycle is limited.

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See also:

Occidental Petroleum Corporation Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

Occidental Petroleum Corporation's fixed asset turnover ratio has shown a fluctuating trend over the past few years, starting at 0.29 in March 2020, declining to 0.26 in December 2020, before increasing to 0.62 by December 2022. This ratio measures the efficiency of the company in generating revenue from its fixed assets. An increase in this ratio indicates that Occidental is utilizing its fixed assets more effectively to generate sales.

In contrast, the total asset turnover ratio, which evaluates how well the company is generating revenue from all its assets, has generally shown an upward trend. From March 2020 to December 2022, the ratio increased steadily from 0.22 to 0.50. A higher total asset turnover ratio suggests that Occidental is efficiently using all its assets to generate sales.

Comparing the fixed asset turnover with the total asset turnover can provide insights into how well Occidental is managing its total asset base in relation to its fixed assets specifically. Overall, the trend in both ratios indicates an improvement in the company's asset utilization efficiency over the years.

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See also:

Occidental Petroleum Corporation Long-term (Investment) Activity Ratios (Quarterly Data)