Southwestern Energy Company (SWN)

Cash conversion cycle

		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	118.01	662.92	857.75	960.20	268.65	294.68	178.12	149.78	294.25	83.98	54.32	37.26	29.24	32.71	73.66	137.70	542.62	411.49	201.81	46.84
Days of sales outstanding (DSO)	days	28.22	19.46	17.63	17.35	37.84	50.93	55.82	45.52	65.20	76.55	71.22	65.53	57.95	38.19	33.83	33.15	39.12	32.31	34.57	38.31
Number of days of payables	days	266.01	2,598.41	2,800.36	3,212.41	3,399.87	3,174.50	2,629.46	2,163.82	2,061.37	616.95	268.71	151.65	69.53	57.17	67.34	102.12	1,024.73	928.00	564.88	337.01
Cash conversion cycle	days	-119.78	-1,916.03	-1,924.98	-2,234.87	-3,093.38	-2,828.89	-2,395.52	-1,968.52	-1,701.92	-456.42	-143.17	-48.86	17.66	13.73	40.16	68.73	-442.99	-484.20	-328.50	-251.86

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 shown fluctuations over the past eight quarters. In Q1 2022, the company had a cash conversion cycle of 45.79 days, which decreased to 17.17 days by Q1 2023, reflecting a significant improvement in managing its cash flow effectively. However, there was a slight increase in the cash conversion cycle to 19.30 days in Q2 2023 before rising further to 26.76 days in Q3 2023. The company experienced a notable increase to 38.06 days in Q4 2023, indicating a lengthening of the time it takes to convert its investments in inventory and other resources into cash receipts from customers.

Overall, the trend in the cash conversion cycle of Southwestern Energy Company over the past eight quarters suggests that the company has been working to streamline its operations to improve efficiency in managing its working capital. However, the recent uptick in the cash conversion cycle may indicate challenges in managing inventory or receivables efficiently. Monitoring and addressing the factors contributing to the increase in the cash conversion cycle will be crucial for the company to maintain its financial health and operational effectiveness.