SM Energy Co (SM)
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 | — | — | — | — | 16.43 | 7.62 | 22.55 | 24.31 | 14.51 | 12.10 | 5.12 | 2.68 | 6.87 | 7.33 | — | — | 9.68 | 37.47 | 58.93 | 122.86 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 0.00 | 16.43 | 7.62 | 22.55 | 24.31 | 14.51 | 12.10 | 5.12 | 2.68 | 6.87 | 7.33 | 0.00 | 0.00 | 9.68 | 37.47 | 58.93 | 122.86 |
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 fluctuations over the years, indicating changes in the efficiency of its working capital management.
In March 2020, the cash conversion cycle was relatively high at 122.86 days, suggesting that the company took a longer time to convert its investments in inventory and other resources into cash. However, there was a significant improvement by December 2020, with the cycle reducing to 9.68 days, indicating a more efficient cash conversion process.
The company managed to maintain a very short cash conversion cycle in 2021, with no days required to convert investments into cash. This could be a result of better inventory management or quicker collection of receivables during this period.
Subsequently, there was a slight increase in the cash conversion cycle in the following periods, reaching 24.31 days by March 2023. This suggests that the company may have faced challenges in managing its working capital efficiently during that time.
By December 2024, the cash conversion cycle returned to zero days, indicating a reversal to a very efficient cash conversion process. It is important to monitor future trends in the cash conversion cycle to assess the company's ongoing ability to manage its working capital effectively and generate cash flow efficiently.
Peer comparison
Dec 31, 2024