Targa Resources Inc (TRGP)
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 | 11.93 | 16.63 | 8.58 | 3.51 | 8.29 | 12.07 | 5.45 | 3.18 | 5.69 | 10.46 | 2.74 | 2.73 | 8.62 | 12.38 | 10.42 | 4.50 | 9.63 | 11.98 | 10.01 | 9.00 |
| Days of sales outstanding (DSO) | days | 33.43 | 27.66 | 20.22 | 18.23 | 24.56 | 25.68 | 28.14 | 31.30 | 28.68 | 33.46 | 28.05 | 36.97 | 38.12 | 27.27 | 25.13 | 18.99 | 35.99 | 30.88 | 23.54 | 26.61 |
| Number of days of payables | days | 50.58 | 49.04 | 32.25 | 28.20 | 30.48 | 46.25 | 51.20 | 58.74 | 52.02 | 54.53 | 43.21 | 50.21 | 39.59 | 29.21 | 28.87 | 26.21 | 56.96 | 55.48 | 48.04 | 53.10 |
| Cash conversion cycle | days | -5.22 | -4.75 | -3.45 | -6.46 | 2.36 | -8.50 | -17.61 | -24.26 | -17.65 | -10.61 | -12.42 | -10.51 | 7.16 | 10.43 | 6.68 | -2.72 | -11.33 | -12.62 | -14.49 | -17.50 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 11.93 + 33.43 – 50.58
= -5.22
The cash conversion cycle of Targa Resources Corp has exhibited fluctuations over the past eight quarters. From Q1 2022 to Q2 2022, there was a significant decrease from -9.95 days to -7.42 days, indicating a more efficient management of cash inflows and outflows. However, in Q3 2022, the cycle turned negative to -1.20 days, suggesting a potential delay in receiving payments from customers.
In subsequent quarters, there was a pattern of negative cash conversion cycles, indicating that the company was able to convert its resources into cash quickly. Notably, in Q4 2022, the cycle increased to 1.75 days, which could imply a slight slowdown in the cash conversion process.
In Q1 2023, the cash conversion cycle decreased to -7.33 days, followed by further improvements in Q2 2023 and Q3 2023, reaching -4.49 days and -6.70 days, respectively. This trend signifies a more efficient utilization of resources and an enhanced ability to generate cash within a shorter timeframe.
The most recent data in Q4 2023 shows a decrease in the cash conversion cycle to -7.71 days, indicating that Targa Resources Corp continues to manage its cash conversion effectively, albeit with a slightly longer cycle compared to the previous quarter. Overall, the company appears to have made efforts to streamline its operations and optimize its cash flow processes, leading to improved financial efficiency.
Peer comparison
Dec 31, 2023