Phillips 66 (PSX)

Activity ratios

Short-term

Turnover ratios

	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
Inventory turnover	34.91	23.34	21.64	27.55	47.00	34.43	30.07	26.54	31.52	21.06	16.72	14.94	16.68	15.27	16.39	18.65	26.33	17.73	19.57	18.88
Receivables turnover	12.60	12.63	16.72	18.62	15.97	12.28	11.37	12.41	14.57	12.24	9.54	8.14	8.16	13.11	18.50	23.51	12.87	15.45	16.69	15.55
Payables turnover	—	—	—	15.12	14.33	12.91	11.01	9.98	14.02	11.30	9.85	8.53	12.55	15.25	17.17	20.37	12.36	12.65	13.65	12.14
Working capital turnover	36.18	29.78	32.10	21.80	29.09	31.11	31.19	57.65	60.47	46.72	67.66	22.24	17.42	33.86	36.26	91.12	39.84	30.99	35.93	32.57

Inventory turnover measures how efficiently a company manages its inventory by showing how many times inventory is sold and replaced over a period. In the case of Phillips 66, the inventory turnover has fluctuated over the quarters but generally appears strong, with Q4 2023 showing a high turnover rate of 34.16 compared to the previous quarters.

Receivables turnover ratio indicates how well a company collects its outstanding accounts receivable during a period. Phillips 66 has maintained a relatively stable receivables turnover ratio, hovering around 12 to 18 over the quarters, reflecting efficient collection processes.

Payables turnover ratio assesses how efficiently a company pays its suppliers. Phillips 66 has shown consistent payment cycles, with the payables turnover ratio ranging from 10 to 13 across the quarters, suggesting a steady approach to managing payables.

Working capital turnover measures how effectively a company utilizes its working capital to generate sales revenue. A higher working capital turnover ratio indicates efficient management of working capital. Phillips 66 has demonstrated strong working capital turnover, with Q1 2022 notably showing a high ratio of 55.99, indicating efficient utilization of resources to drive revenue generation.

Overall, Phillips 66 appears to be efficiently managing its inventory, receivables, payables, and working capital based on the analysis of activity ratios across the quarters.

Average number of days

		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	10.46	15.64	16.86	13.25	7.77	10.60	12.14	13.75	11.58	17.33	21.83	24.44	21.89	23.90	22.27	19.57	13.86	20.58	18.65	19.33
Days of sales outstanding (DSO)	days	28.97	28.89	21.82	19.61	22.85	29.72	32.09	29.41	25.06	29.81	38.27	44.86	44.73	27.84	19.73	15.53	28.36	23.62	21.87	23.47
Number of days of payables	days	—	—	—	24.14	25.48	28.27	33.16	36.57	26.03	32.31	37.05	42.80	29.07	23.94	21.26	17.92	29.52	28.85	26.74	30.06

Days of Inventory on Hand (DOH) measures how many days, on average, the company holds inventory before selling it. A lower DOH indicates that the company is efficiently managing its inventory levels, which can lead to cost savings and better cash flow.

For Phillips 66, the trend in inventory management seems to fluctuate over the quarters, with Q4 2023 showing an increase in DOH compared to the previous quarter. However, in comparison to Q4 2022, the current DOH is still higher. This suggests that the company may be carrying excess inventory, which could tie up capital and indicate potential inefficiencies in inventory management.

Days of Sales Outstanding (DSO) measures the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO indicates that the company is collecting payments more quickly, which is favorable for cash flow management.

Phillips 66 has shown a slight improvement in DSO over the last two quarters, with Q4 2023 exhibiting a decrease compared to the previous quarter. However, the DSO for Q4 2023 is slightly higher than the DSO in Q1 2023. This indicates that the company may be improving its collection process but might still have room for further optimization.

Number of Days of Payables measures how long, on average, a company takes to pay its suppliers. A higher number of days of payables suggests that the company is taking longer to settle its accounts payable, which can indicate favorable cash flow management but may also signal strained relationships with suppliers.

In the case of Phillips 66, the number of days of payables has decreased in the most recent quarter, indicating that the company is paying its suppliers more promptly compared to the previous quarter. However, the number of days of payables for Q4 2023 is still higher than in Q2 and Q1 2023. This suggests that the company may have adjusted its payment terms but is still managing its payables relatively efficiently.

Overall, Phillips 66's activity ratios suggest some fluctuations in inventory management efficiency and collection processes, with indications of improvement in payment cycles. Adjustments in these areas could further optimize the company's working capital and cash flow management.

Long-term

	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
Fixed asset turnover	4.17	4.26	4.49	4.95	5.03	4.79	6.85	5.81	5.17	4.38	3.51	2.81	2.79	3.33	3.70	4.46	4.66	4.77	4.99	5.10
Total asset turnover	1.96	1.94	2.11	2.25	2.30	2.17	2.43	2.14	2.06	1.74	1.46	1.20	1.20	1.44	1.65	2.00	1.87	1.86	1.94	1.96

The fixed asset turnover ratio of Phillips 66 has shown a decreasing trend over the last eight quarters, starting at 6.64 in Q2 2022 and gradually declining to 4.13 in Q4 2023. This indicates that the company generated $4.13 in revenue for every dollar invested in fixed assets in the most recent quarter. The decreasing trend suggests that the company may be less efficient in utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio of Phillips 66 has shown fluctuations but maintains a relatively stable range. It started at 2.35 in Q2 2022, decreased to 1.92 in Q3 2023, and then increased to 1.95 in the most recent quarter, Q4 2023. This ratio reflects the company's ability to generate sales using all its assets, including fixed and current assets. A total asset turnover ratio of 1.95 in Q4 2023 indicates that the company generated $1.95 in revenue for every dollar of total assets in that quarter.

In summary, while the fixed asset turnover ratio of Phillips 66 has been declining, the total asset turnover ratio has shown fluctuations but has been relatively stable. The company may need to focus on improving the efficiency of utilizing its fixed assets to generate revenue in the future.