SM Energy Co (SM)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 16.43 | 14.51 | 6.87 | 9.68 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 0.00 | 16.43 | 14.51 | 6.87 | 9.68 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00
The cash conversion cycle of SM Energy Co has shown some fluctuations over the years based on the provided data. As of December 31, 2020, the company had a cash conversion cycle of 9.68 days, indicating that it took approximately 9.68 days to convert its investments in inventory and accounts receivable into cash. By December 31, 2021, the cash conversion cycle improved to 6.87 days, suggesting a more efficient management of its working capital.
However, there was a significant increase in the cash conversion cycle by December 31, 2022, reaching 14.51 days. This may imply that the company faced challenges in converting its inventory and receivables into cash within a shorter period, potentially leading to liquidity concerns.
Subsequently, by December 31, 2023, the cash conversion cycle further extended to 16.43 days, indicating a continued strain on the company's working capital management. However, the data for December 31, 2024, shows a significant improvement with a cash conversion cycle of 0.00 days. This may suggest a more streamlined approach to managing working capital, potentially through efficient inventory management and quicker collection of receivables.
In summary, the data reveals fluctuations in SM Energy Co's cash conversion cycle over the years, with periods of improvement and challenges. It is important for the company to closely monitor and manage its working capital efficiency to ensure healthy cash flows and overall financial stability.
Peer comparison
Dec 31, 2024