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.