Phillips 66 (PSX)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 10.90 | 15.95 | 16.98 | 17.03 | 10.40 | 15.93 | 17.17 | 13.47 | 7.89 | 10.76 | 12.43 | 14.12 | 11.95 | 17.96 | 22.71 | 25.68 | 24.04 | 25.52 | 23.63 | 20.64 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 10.90 | 15.95 | 16.98 | 17.03 | 10.40 | 15.93 | 17.17 | 13.47 | 7.89 | 10.76 | 12.43 | 14.12 | 11.95 | 17.96 | 22.71 | 25.68 | 24.04 | 25.52 | 23.63 | 20.64 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 10.90 + — – —
= 10.90
The cash conversion cycle of Phillips 66 has shown fluctuations over the years based on the provided data. In March 2020, the company had a cash conversion cycle of 20.64 days, indicating that on average, it took about 20.64 days for the company to convert its investments in inventory and other resources into cash flows from sales.
The cycle increased slightly by June 2020 but peaked at 25.68 days by March 2021, suggesting a longer period to convert investments into cash. However, starting from September 2021, there was a significant improvement in the cash conversion cycle, dropping to 17.96 days and further decreasing to a low of 7.89 days by December 2022.
In the following periods, although there were fluctuations, the average time it took for Phillips 66 to convert its resources into cash remained relatively lower compared to previous years. The trend indicates that the company managed its inventory and accounts receivable efficiently to improve its cash conversion cycle significantly by optimizing its working capital management.
Overall, the decreasing trend in the cash conversion cycle is a positive sign for Phillips 66 as it suggests better management of its working capital and improved efficiency in converting investments into cash, ultimately enhancing liquidity and financial performance.
Peer comparison
Dec 31, 2024