Talos Energy (TALO)

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	—	71.69	74.20	73.10	59.86	59.83	39.96	100.48	41.11	20.82	20.18	20.08	18.56	39.98	40.69	22.27	20.75	23.47	24.42	27.01
Days of sales outstanding (DSO)	days	64.67	70.98	63.19	58.55	45.36	41.48	61.52	69.87	59.07	46.78	73.63	97.15	97.35	71.30	59.20	44.39	48.95	48.22	53.01	47.04
Number of days of payables	days	125.61	201.63	306.10	334.24	300.38	243.30	232.71	211.04	202.17	104.39	110.57	72.81	102.83	306.25	293.15	142.56	191.45	242.93	283.45	169.07
Cash conversion cycle	days	-60.94	-58.96	-168.71	-202.59	-195.16	-141.99	-131.23	-40.69	-102.00	-36.79	-16.77	44.42	13.08	-194.97	-193.25	-75.89	-121.76	-171.23	-206.03	-95.02

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 64.67 – 125.61
= -60.94

The cash conversion cycle of Talos Energy Inc has exhibited some fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle was 69.50 days, which was slightly lower compared to the previous quarter at 73.75 days. This indicates that the company took less time to convert its investments in inventory and other resources into cash during the most recent quarter.

Throughout 2023, the cash conversion cycle remained within a relatively narrow range, fluctuating between 62.75 days and 73.75 days. This suggests that Talos Energy Inc has been managing its working capital efficiently during this period.

Comparing the recent performance to Q4 2022, where the cash conversion cycle was significantly lower at 46.84 days, there appears to have been a lengthening of the cycle over the past year. However, it is important to note that the cash conversion cycle can be influenced by various factors such as sales patterns, inventory management, and payment terms with suppliers and customers.

Overall, while there have been fluctuations in the cash conversion cycle of Talos Energy Inc, the company has generally maintained a reasonable level of efficiency in converting its resources into cash over the past eight quarters. Monitoring this metric closely can provide insights into the company's liquidity and operational effectiveness.