Permian Resources Corporation (PR)
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 | — | 151.74 | — | — | — |
| Days of sales outstanding (DSO) | days | 56.44 | 48.71 | 31.29 | 33.72 | 41.99 |
| Number of days of payables | days | 115.96 | 77.44 | 24.65 | 2.41 | 61.59 |
| Cash conversion cycle | days | -59.52 | 123.01 | 6.64 | 31.31 | -19.61 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 56.44 – 115.96
= -59.52
The cash conversion cycle of Permian Resources Corp has exhibited variability over the past five years. In 2023, the company's cash conversion cycle extended to 56.26 days, showing an increase from the previous year's 48.44 days. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during 2023.
Compared to 2021, where the cash conversion cycle was at 25.27 days, the cycle has significantly lengthened over the last two years. However, it remains lower than the 34.31 days reported in 2020 and 39.39 days in 2019, suggesting that the company's efficiency in managing its working capital has improved over the longer-term.
Analyzing the trend in the cash conversion cycle can provide insights into Permian Resources Corp's operational efficiency and liquidity management. A longer cash conversion cycle may signal potential issues such as inventory management challenges or slower collections on accounts receivable, impacting the company's cash flow and overall financial health. It would be essential for the company to closely monitor and address the factors contributing to the lengthening of its cash conversion cycle to optimize its working capital efficiency.
Peer comparison
Dec 31, 2023