Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Chevron Corp., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Inventory Turnover
- The inventory turnover ratio shows an overall upward trend from 16.64 in 2020 to a peak of 28.58 in 2022, indicating improved efficiency in managing inventory. However, it declined to 22.86 in 2023 and further to 21.32 in 2024, suggesting a slight reduction in inventory management efficiency in the most recent years.
- Receivables Turnover
- The receivables turnover ratio increased from 8.24 in 2020 to a high of 11.52 in 2022, reflecting faster collection of receivables during that period. It subsequently decreased to 9.88 in 2023 and 9.35 in 2024, signaling a moderation in the speed of receivables collection.
- Payables Turnover
- Payables turnover rose from 8.63 in 2020 to a peak of 12.44 in 2022, showing quicker payment to suppliers in this timeframe. Afterwards, it declined to 9.64 in 2023 and further to 8.76 in 2024, indicating a return to slower payment cycles.
- Working Capital Turnover
- The working capital turnover ratio decreased significantly from 24.25 in 2020 to 14.61 in 2022, suggesting less efficient use of working capital during those years. This ratio rebounded sharply to 22.2 in 2023 and experienced dramatic growth to 82.2 in 2024, which could indicate a substantial increase in operational efficiency or possibly a reduction in working capital levels.
- Average Inventory Processing Period
- The average inventory processing period shortened from 22 days in 2020 to 13 days in 2022, correlating with the rise in inventory turnover. There was a slight increase to 16 days in 2023 and 17 days in 2024, consistent with the observed decrease in inventory turnover.
- Average Receivable Collection Period
- The average receivable collection period decreased from 44 days in 2020 to 32 days in 2022, aligning with the improvement in receivables turnover. It then rose modestly to 37 days in 2023 and 39 days in 2024, reflecting the slowed collections.
- Operating Cycle
- The operating cycle shortened from 66 days in 2020 to 45 days in 2022, indicating overall improved operational efficiency. Subsequently, it lengthened somewhat to 53 days in 2023 and 56 days in 2024.
- Average Payables Payment Period
- The average payables payment period declined from 42 days in 2020 to 29 days in 2022, suggesting faster payments to suppliers. This trend reversed with the period increasing to 38 days in 2023 and returning to 42 days in 2024, highlighting a relaxation in payment speed.
- Cash Conversion Cycle
- The cash conversion cycle improved steadily from 24 days in 2020 to 14 days in 2024, indicating a reduction in the net time between cash outflows and inflows. The most notable improvements occurred between 2020 and 2022, with minor further gains in subsequent years.
Turnover Ratios
Average No. Days
Inventory Turnover
Chevron Corp., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales and other operating revenues | 193,414) | 196,913) | 235,717) | 155,606) | 94,471) | |
| Inventories | 9,074) | 8,612) | 8,247) | 6,305) | 5,676) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 21.32 | 22.86 | 28.58 | 24.68 | 16.64 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| ConocoPhillips | 30.26 | 40.16 | 64.39 | 37.94 | 18.75 | |
| Exxon Mobil Corp. | 14.42 | 13.32 | 16.32 | 14.73 | 9.47 | |
| Occidental Petroleum Corp. | 12.76 | 13.97 | 17.79 | 14.06 | 9.38 | |
| Inventory Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | 16.82 | 16.58 | 20.84 | 17.91 | 11.29 | |
| Inventory Turnover, Industry | ||||||
| Energy | 15.73 | 15.47 | 19.33 | 16.66 | 10.74 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Inventory turnover = Sales and other operating revenues ÷ Inventories
= 193,414 ÷ 9,074 = 21.32
2 Click competitor name to see calculations.
- Sales and Other Operating Revenues
- The sales and other operating revenues show a significant increase from 94,471 million USD in 2020 to a peak of 235,717 million USD in 2022. However, after this peak, there is a notable decline to 196,913 million USD in 2023, followed by a slight further decrease to 193,414 million USD in 2024. This pattern suggests a period of robust revenue growth up to 2022, potentially driven by favorable market or operational conditions, with subsequent revenue contraction in the following two years.
- Inventories
- Inventories consistently increase each year, rising from 5,676 million USD in 2020 to 9,074 million USD in 2024. The trend indicates a steady accumulation of inventory over the five-year period, which may reflect either increased production capacity, strategic stockpiling, or changes in supply chain management.
- Inventory Turnover Ratio
- The inventory turnover ratio shows significant fluctuations. It increases sharply from 16.64 in 2020 to a high of 28.58 in 2022, indicating a faster clearance of inventory relative to sales during this period. Subsequently, the ratio declines to 22.86 in 2023 and further to 21.32 in 2024. This decline may signal a slowing in the rate at which inventory is sold or used, potentially linked to reduced sales levels or rising inventory levels.
- Overall Analysis
- The data reveals a growth phase from 2020 through 2022 characterized by rising revenues and increased efficiency in inventory management, as indicated by higher inventory turnover. Starting from 2023, while inventories continue to grow, sales recede, leading to decreased inventory turnover. This combination suggests a potential imbalance between sales and inventory levels in the latter years, which may warrant further investigation into demand factors, inventory management practices, or market conditions affecting revenue generation.
Receivables Turnover
Chevron Corp., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales and other operating revenues | 193,414) | 196,913) | 235,717) | 155,606) | 94,471) | |
| Accounts and notes receivable, less allowance | 20,684) | 19,921) | 20,456) | 18,419) | 11,471) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 9.35 | 9.88 | 11.52 | 8.45 | 8.24 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| ConocoPhillips | 8.27 | 10.28 | 11.09 | 7.00 | 7.13 | |
| Exxon Mobil Corp. | 9.62 | 11.05 | 12.14 | 10.29 | 10.93 | |
| Occidental Petroleum Corp. | 7.58 | 8.84 | 8.56 | 6.17 | 8.42 | |
| Receivables Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | 9.29 | 10.46 | 11.59 | 8.99 | 9.51 | |
| Receivables Turnover, Industry | ||||||
| Energy | 8.77 | 9.73 | 10.85 | 8.59 | 8.81 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Receivables turnover = Sales and other operating revenues ÷ Accounts and notes receivable, less allowance
= 193,414 ÷ 20,684 = 9.35
2 Click competitor name to see calculations.
- Sales and Other Operating Revenues
- The sales and other operating revenues demonstrate a pronounced growth trend from 2020 through 2022, with values increasing significantly from approximately $94.5 billion to about $235.7 billion. However, from 2022 onwards, there is a noticeable decline in revenues, decreasing first to approximately $196.9 billion in 2023 and slightly further to about $193.4 billion in 2024. This suggests a peak in operational income in 2022 followed by a reduction in the subsequent two years.
- Accounts and Notes Receivable, Less Allowance
- Accounts and notes receivable increase steadily across the entire period, starting from roughly $11.5 billion in 2020 and growing to nearly $20.7 billion by 2024. The rise, although consistent, appears moderate in comparison to the rapid growth observed in sales up to 2022. A small dip in 2023 is observed but is recovered in 2024, indicating a relatively stable asset base in terms of receivables.
- Receivables Turnover Ratio
- The receivables turnover ratio moves upward from approximately 8.24 in 2020 to a peak of 11.52 in 2022, implying improved efficiency in collecting receivables during this period. Following that peak, the ratio decreases to 9.88 in 2023 and further to 9.35 in 2024, indicating a decline in collection efficiency or an increase in the average collection period after 2022, though it remains above the 2020 level.
- Overall Insights
- The data suggest a period of strong revenue growth culminating in 2022 with concurrent improvements in receivables collection efficiency. Post-2022, there is a reversal in revenue trends coupled with a reduction in turnover efficiency, potentially signaling market challenges or operational shifts impacting cash flow management. The steady rise in receivables despite reduced revenues may indicate lengthening credit terms or slower payments from customers during the latter period.
Payables Turnover
Chevron Corp., payables turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales and other operating revenues | 193,414) | 196,913) | 235,717) | 155,606) | 94,471) | |
| Accounts payable | 22,079) | 20,423) | 18,955) | 16,454) | 10,950) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 8.76 | 9.64 | 12.44 | 9.46 | 8.63 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| ConocoPhillips | 9.14 | 11.04 | 12.84 | 9.16 | 7.04 | |
| Exxon Mobil Corp. | 9.39 | 10.71 | 12.02 | 10.39 | 10.20 | |
| Occidental Petroleum Corp. | 7.12 | 7.75 | 9.09 | 6.66 | 5.96 | |
| Payables Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | 9.04 | 10.20 | 12.04 | 9.70 | 9.08 | |
| Payables Turnover, Industry | ||||||
| Energy | 8.91 | 9.88 | 11.67 | 9.48 | 8.93 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Payables turnover = Sales and other operating revenues ÷ Accounts payable
= 193,414 ÷ 22,079 = 8.76
2 Click competitor name to see calculations.
The analysis of the annual financial data reveals several trends and insights regarding the company's operational performance and efficiency over the reported periods.
- Sales and Other Operating Revenues
- There was a significant increase in sales and other operating revenues from 2020 to 2022, rising from 94,471 million US dollars to 235,717 million US dollars. This represents strong growth over the initial two years. However, revenues declined in the subsequent years, dropping to 196,913 million US dollars in 2023 and further to 193,414 million in 2024. Despite the decrease, revenues in 2023 and 2024 remained notably higher than the 2020 level.
- Accounts Payable
- Accounts payable showed a consistent upward trend throughout the five-year period. Beginning at 10,950 million US dollars in 2020, this figure increased each year, reaching 22,079 million US dollars by the end of 2024. The steady rise in accounts payable indicates an increasing amount of obligations to suppliers or creditors.
- Payables Turnover Ratio
- The payables turnover ratio exhibited some volatility during the periods analyzed. It increased from 8.63 in 2020 to a peak of 12.44 in 2022, suggesting faster payment to suppliers in that year. However, the ratio declined to 9.64 in 2023 and further to 8.76 in 2024. This decline indicates a slower turnover of payables in the most recent years, which may reflect changes in payment policies, improved cash flow management, or other operational factors.
In summary, the company experienced robust revenue growth initially, followed by a decline in the last two years, though still maintaining revenue levels above those in 2020. Accounts payable increased steadily, which could suggest expanded operations or changes in supplier credit terms. The payables turnover ratio showed an initial improvement in payment efficiency, but this trend reversed in later years, signaling a potential slowdown in the pace at which payables are settled.
Working Capital Turnover
Chevron Corp., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 40,911) | 41,128) | 50,343) | 33,738) | 26,078) | |
| Less: Current liabilities | 38,558) | 32,258) | 34,208) | 26,791) | 22,183) | |
| Working capital | 2,353) | 8,870) | 16,135) | 6,947) | 3,895) | |
| Sales and other operating revenues | 193,414) | 196,913) | 235,717) | 155,606) | 94,471) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 82.20 | 22.20 | 14.61 | 22.40 | 24.25 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| ConocoPhillips | 15.54 | 12.98 | 13.30 | 11.37 | 2.80 | |
| Exxon Mobil Corp. | 15.65 | 10.70 | 13.95 | 110.19 | — | |
| Occidental Petroleum Corp. | — | — | 32.45 | 13.76 | 29.88 | |
| Working Capital Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | 22.65 | 14.09 | 14.48 | 32.79 | — | |
| Working Capital Turnover, Industry | ||||||
| Energy | 19.79 | 13.51 | 14.21 | 29.83 | 155.07 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Working capital turnover = Sales and other operating revenues ÷ Working capital
= 193,414 ÷ 2,353 = 82.20
2 Click competitor name to see calculations.
- Working Capital
- The working capital showed a generally increasing trend from 2020 to 2022, rising from 3,895 million US dollars to 16,135 million US dollars. However, it experienced a significant decline in 2023 down to 8,870 million US dollars and further dropped to 2,353 million US dollars in 2024, indicating a reduction in the company's short-term liquidity position in the latter years.
- Sales and Other Operating Revenues
- Sales and other operating revenues exhibited a consistent upward trend from 94,471 million US dollars in 2020 to a peak of 235,717 million US dollars in 2022. Thereafter, revenues declined in 2023 to 196,913 million US dollars and slightly decreased further in 2024 to 193,414 million US dollars. This pattern indicates a peak in operating performance in 2022 followed by a contraction in the following two years.
- Working Capital Turnover
- The working capital turnover ratio decreased from 24.25 in 2020 to 14.61 in 2022, suggesting a declining efficiency in using working capital to generate sales during that period. In 2023, the ratio improved to 22.2, indicating better utilization of working capital. In 2024, the ratio surged dramatically to 82.2, which may reflect the substantial decrease in working capital combined with relatively stable revenue levels, signaling an unusual or possibly less sustainable efficiency ratio.
- Summary of Trends
- Overall, the data reveals an initial growth phase in both working capital and sales up to 2022. Following that, there is a notable contraction in working capital and revenues. The working capital turnover ratio's trends suggest a decline in operational efficiency until 2022, a recovery in 2023, and an abnormal spike in 2024 primarily driven by the reduction in working capital rather than a surge in sales. These changes suggest evolving liquidity management and operational dynamics that may warrant further investigation into the underlying business conditions and strategies during the recent years.
Average Inventory Processing Period
Chevron Corp., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 21.32 | 22.86 | 28.58 | 24.68 | 16.64 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 17 | 16 | 13 | 15 | 22 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| ConocoPhillips | 12 | 9 | 6 | 10 | 19 | |
| Exxon Mobil Corp. | 25 | 27 | 22 | 25 | 39 | |
| Occidental Petroleum Corp. | 29 | 26 | 21 | 26 | 39 | |
| Average Inventory Processing Period, Sector | ||||||
| Oil, Gas & Consumable Fuels | 22 | 22 | 18 | 20 | 32 | |
| Average Inventory Processing Period, Industry | ||||||
| Energy | 23 | 24 | 19 | 22 | 34 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 21.32 = 17
2 Click competitor name to see calculations.
The data reveals notable trends in the company's inventory management over the five-year period in question. The inventory turnover ratio demonstrates a general upward movement from 2020 through 2022, increasing from 16.64 to a peak of 28.58. This suggests enhanced efficiency in converting inventory into sales during this period. However, following 2022, a declining trend is observed, with the ratio decreasing to 22.86 in 2023 and further to 21.32 in 2024. Although the turnover remains higher than the initial value in 2020, the recent decline indicates a possible slowing in inventory turnover efficiency.
Correspondingly, the average inventory processing period, measured in days, follows an inverse pattern relative to the turnover ratio, which aligns with expected relationships between these metrics. It reduces significantly from 22 days in 2020 to the shortest period of 13 days in 2022, indicating faster inventory processing and potentially better demand fulfillment. Post-2022, this period extends, increasing to 16 days in 2023 and 17 days in 2024. This lengthening of the inventory processing period suggests that inventory is being held longer than in the prior peak efficiency year, which could imply changes in sales dynamics, purchasing practices, or inventory management policies.
Overall, the period shows an improvement in inventory management efficiency reaching its optimum around 2022, followed by a moderate reversal. The shift post-2022 warrants further analysis to identify underlying causes such as market conditions, supply chain factors, or changes in operational strategy that may be affecting inventory turnover rates and processing periods.
Average Receivable Collection Period
Chevron Corp., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 9.35 | 9.88 | 11.52 | 8.45 | 8.24 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 39 | 37 | 32 | 43 | 44 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| ConocoPhillips | 44 | 36 | 33 | 52 | 51 | |
| Exxon Mobil Corp. | 38 | 33 | 30 | 35 | 33 | |
| Occidental Petroleum Corp. | 48 | 41 | 43 | 59 | 43 | |
| Average Receivable Collection Period, Sector | ||||||
| Oil, Gas & Consumable Fuels | 39 | 35 | 31 | 41 | 38 | |
| Average Receivable Collection Period, Industry | ||||||
| Energy | 42 | 37 | 34 | 43 | 41 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 9.35 = 39
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibits notable variability over the analyzed period. Starting at 8.24 in 2020, it increased moderately to 8.45 in 2021, followed by a significant peak to 11.52 in 2022. This peak suggests an improvement in the company's efficiency in collecting receivables during that year. However, in the subsequent periods, the ratio declined to 9.88 in 2023 and further to 9.35 in 2024, indicating a slight reduction in collection efficiency compared to the 2022 high point, but still remaining above the 2020 and 2021 levels.
- Average Receivable Collection Period
- The average collection period mirrors the inverse trend of the receivables turnover ratio, which is expected. It decreased from 44 days in 2020 to 43 days in 2021, then experienced a significant decline to 32 days in 2022. This reduction indicates a faster conversion of receivables into cash at that time. In 2023 and 2024, the collection period lengthened to 37 and 39 days respectively, reflecting a slowdown relative to 2022 but still better than the levels observed in 2020 and 2021.
- Overall Receivables Management
- The data suggest an overall improvement in receivables management efficiency peaking in 2022, as evidenced by the highest turnover ratio and the shortest collection period. The following two years show a mild reversal, with a decrease in turnover and an increase in days outstanding, yet the figures remain improved compared to earlier years. This pattern could indicate that while the company achieved an optimal receivable position in 2022, external or operational factors may have slightly impacted collection efficiency thereafter, though it has not returned to initial levels.
Operating Cycle
Chevron Corp., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 17 | 16 | 13 | 15 | 22 | |
| Average receivable collection period | 39 | 37 | 32 | 43 | 44 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 56 | 53 | 45 | 58 | 66 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| ConocoPhillips | 56 | 45 | 39 | 62 | 70 | |
| Exxon Mobil Corp. | 63 | 60 | 52 | 60 | 72 | |
| Occidental Petroleum Corp. | 77 | 67 | 64 | 85 | 82 | |
| Operating Cycle, Sector | ||||||
| Oil, Gas & Consumable Fuels | 61 | 57 | 49 | 61 | 70 | |
| Operating Cycle, Industry | ||||||
| Energy | 65 | 61 | 53 | 65 | 75 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 17 + 39 = 56
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period decreased from 22 days in 2020 to a low of 13 days in 2022, indicating an improvement in inventory turnover efficiency during this period. However, there was a slight increase to 16 days in 2023 and 17 days in 2024, suggesting a modest slowdown in inventory processing after the initial improvement.
- Average Receivable Collection Period
- The average receivable collection period showed a general downward trend from 44 days in 2020 to 32 days in 2022, reflecting an enhancement in the speed of collecting receivables. This was followed by a minor increase to 37 days in 2023 and 39 days in 2024, implying some easing in collection efficiency but still remaining better than the starting period.
- Operating Cycle
- The operating cycle consistently declined from 66 days in 2020 to 45 days in 2022, representing overall operational improvements in managing inventory and receivables. Subsequently, the operating cycle lengthened slightly to 53 days in 2023 and 56 days in 2024, indicating a partial reversal of the earlier gains but maintaining a shorter cycle compared to the initial year.
Average Payables Payment Period
Chevron Corp., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 8.76 | 9.64 | 12.44 | 9.46 | 8.63 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 42 | 38 | 29 | 39 | 42 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| ConocoPhillips | 40 | 33 | 28 | 40 | 52 | |
| Exxon Mobil Corp. | 39 | 34 | 30 | 35 | 36 | |
| Occidental Petroleum Corp. | 51 | 47 | 40 | 55 | 61 | |
| Average Payables Payment Period, Sector | ||||||
| Oil, Gas & Consumable Fuels | 40 | 36 | 30 | 38 | 40 | |
| Average Payables Payment Period, Industry | ||||||
| Energy | 41 | 37 | 31 | 38 | 41 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.76 = 42
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio showed a fluctuating trend over the analyzed periods. Starting at 8.63 in 2020, it increased notably to 9.46 in 2021 and then peaked at 12.44 in 2022, indicating a faster rate of paying off suppliers during that year. However, the ratio declined in 2023 to 9.64 and slightly decreased further to 8.76 by the end of 2024. This pattern suggests that after an initial acceleration in paying off payables, the company’s payment speed moderated back towards the level observed at the beginning of the period.
- Average Payables Payment Period
- The average payables payment period, expressed in number of days, exhibited an inverse relationship with the payables turnover ratio. In 2020, the payment period was 42 days, which decreased to 39 days in 2021 and significantly dropped to 29 days in 2022. This corresponds to the peak in payables turnover for 2022, indicating a quicker payment cycle. Subsequently, the payment period lengthened to 38 days in 2023 and returned to 42 days by the end of 2024, reflecting a return to a more extended payment timeline similar to the initial period.
- Overall Insights
- The data reveals a cyclical trend where the company accelerated payments to suppliers during the middle of the period (particularly in 2022), likely improving supplier relationships or capital flow efficiency during that time. However, this acceleration was not sustained, with payment speeds slowing and returning to initial levels by 2024. The company appears to have balanced its payment terms over the five-year span, indicating possible shifts in working capital management strategies or external conditions affecting payment behavior.
Cash Conversion Cycle
Chevron Corp., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 17 | 16 | 13 | 15 | 22 | |
| Average receivable collection period | 39 | 37 | 32 | 43 | 44 | |
| Average payables payment period | 42 | 38 | 29 | 39 | 42 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 14 | 15 | 16 | 19 | 24 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| ConocoPhillips | 16 | 12 | 11 | 22 | 18 | |
| Exxon Mobil Corp. | 24 | 26 | 22 | 25 | 36 | |
| Occidental Petroleum Corp. | 26 | 20 | 24 | 30 | 21 | |
| Cash Conversion Cycle, Sector | ||||||
| Oil, Gas & Consumable Fuels | 21 | 21 | 19 | 23 | 30 | |
| Cash Conversion Cycle, Industry | ||||||
| Energy | 24 | 24 | 22 | 27 | 34 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 17 + 39 – 42 = 14
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period shows a general decline from 22 days in 2020 to 13 days in 2022, indicating improved efficiency in inventory turnover during this period. However, there is a slight increase in 2023 and 2024, rising to 16 and 17 days respectively, suggesting a minor slowdown in inventory processing in the most recent years.
- Average Receivable Collection Period
- This period demonstrates a consistent downward trend from 44 days in 2020 to 32 days in 2022, which implies a faster collection of receivables and improved cash inflows. Nonetheless, the trend reverses slightly with increases to 37 days in 2023 and 39 days in 2024, indicating some lengthening in the time taken to collect payments from customers.
- Average Payables Payment Period
- The average payables payment period decreased from 42 days in 2020 to 29 days in 2022, reflecting a quicker payment cycle to suppliers during this time. In 2023 and 2024, this duration extends again to 38 and 42 days, showing a return to the earlier level of payables payment duration, potentially indicating a strategic change or adjustments in supplier payment terms.
- Cash Conversion Cycle
- The cash conversion cycle exhibits a steady improvement over the five-year span, declining from 24 days in 2020 to 14 days in 2024. This consistent reduction, despite slight fluctuations in individual components, suggests that overall working capital management has become more efficient, with faster conversion of investments in inventory and receivables into cash.