Occidental Petroleum Corporation (OXY)

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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	149.40	163.06	161.52	183.73	160.45	149.28	122.77	114.99	161.00	170.39	186.67	64.77	50.62	38.04	31.70	58.21	70.21	61.88	75.14	86.79
Days of sales outstanding (DSO)	days	41.27	45.76	32.99	33.63	42.84	40.19	69.26	68.37	59.17	57.54	61.48	67.43	43.35	37.50	39.09	38.14	111.24	106.12	102.97	105.59
Number of days of payables	days	269.39	322.65	284.28	279.37	313.96	286.31	407.94	381.44	340.06	356.83	360.12	101.82	79.66	61.45	65.13	155.85	218.05	262.42	258.61	307.69
Cash conversion cycle	days	-78.72	-113.83	-89.77	-62.01	-110.67	-96.84	-215.92	-198.09	-119.88	-128.90	-111.97	30.37	14.30	14.08	5.67	-59.50	-36.60	-94.42	-80.51	-115.30

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 149.40 + 41.27 – 269.39
= -78.72

The cash conversion cycle of Occidental Petroleum Corp. has fluctuated over the past eight quarters, indicating variations in the company's efficiency in managing its cash flow and working capital. In the most recent quarter, Q4 2023, the company's cash conversion cycle improved significantly to -148.96 days compared to the previous quarter, Q3 2023, where it was -189.18 days. This suggests that the company was able to optimize its cash flow by reducing the time it takes to convert its investments in inventory and accounts receivable into cash.

However, it's important to note that the cash conversion cycle was still negative in Q4 2023, implying that Occidental Petroleum Corp. is able to generate cash from its operating cycle more quickly than it pays its suppliers. This can be a favorable indicator of liquidity and efficient working capital management.

Looking at historical data, the company experienced a particularly long cash conversion cycle in Q2 and Q1 2022, with figures of -351.58 days and -328.55 days, respectively. These prolonged cycles may indicate inefficiencies in managing working capital during those periods.

Overall, the recent improvement in the cash conversion cycle is a positive sign for Occidental Petroleum Corp., demonstrating enhanced cash flow efficiency. However, it is essential for the company to continue monitoring and optimizing its working capital management to sustain this positive trend in the future.