Exxon Mobil Corp (XOM)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	794.58	625.13	787.81	563.43	528.52
Days of sales outstanding (DSO)	days	45.61	40.27	36.84	41.38	41.39
Number of days of payables	days	1,599.10	1,053.54	1,439.33	1,139.61	710.40
Cash conversion cycle	days	-758.91	-388.14	-614.69	-534.80	-140.49

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 794.58 + 45.61 – 1,599.10
= -758.91

The cash conversion cycle measures the time it takes for a company to convert its investment in inventory into cash. Negative values indicate that the company is efficient in managing its working capital and typically collecting cash from customers before paying its suppliers.

Exxon Mobil Corp's cash conversion cycle has shown volatility over the years, ranging from -140.49 days in 2020 to -758.91 days in 2024. A consistently negative cash conversion cycle implies that Exxon Mobil is adept at quickly converting its inventory into cash, potentially due to efficient inventory management practices and prompt collection of receivables.

The significant decrease in the cash conversion cycle in 2024 to -758.91 days raises some concerns as it may indicate an aggressive inventory management approach or potential delays in paying suppliers. Exxon Mobil should ensure a balance between inventory turnover and payment terms to maintain operational efficiency and sustain healthy working capital management.