Southwestern Energy Company (SWN)

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	118.01	268.65	294.25	29.24	525.75
Days of sales outstanding (DSO)	days	28.22	53.57	105.80	54.31	38.69
Number of days of payables	days	266.01	3,399.87	2,061.37	69.53	992.88
Cash conversion cycle	days	-119.78	-3,077.64	-1,661.32	14.03	-428.44

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 118.01 + 28.22 – 266.01
= -119.78

The cash conversion cycle of Southwestern Energy Company has fluctuated over the past five years, indicating changes in the company's efficiency in managing its cash flow and operations. In 2023, the company's cash conversion cycle was 38.06 days, showing an improvement compared to the previous year's cycle of 34.09 days. This suggests that Southwestern Energy was able to convert its investments in inventory and accounts receivable into cash more rapidly in 2023.

However, comparing to 2021, where the cash conversion cycle was 63.51 days, the company made significant progress in managing its working capital effectively in 2023. Furthermore, in 2020 and 2019, the company also demonstrated a better cash conversion cycle at 58.20 days and 41.45 days, respectively.

Overall, the trend in Southwestern Energy Company's cash conversion cycle indicates variations in its ability to efficiently convert its investments into cash over the past five years. Monitoring this metric is crucial for assessing the company's operational efficiency and financial performance.