Chevron Corp. (NYSE:CVX)

Inventory Turnover

The inventory turnover ratio demonstrates a clear upward trend from the beginning of the data period, rising steadily from 16.64 to a peak of 28.58 in the first quarter of 2023. Following this peak, the ratio generally declines, reaching approximately 19.58 by the second quarter of 2024. It then exhibits a moderate recovery towards the end of the period, closing around 21.3. This pattern suggests an initial improvement in efficiency managing inventory, followed by some softening but maintaining relatively high turnover levels compared to early observations.

Receivables Turnover

The receivables turnover ratio shows some volatility but with an overall increasing trajectory. Starting around 8.24, it dips to 6.79 in mid-2020, then rises sharply to 11.52 by the first quarter of 2023. After peaking at 12.21, the ratio declines slightly and fluctuates around 9 to 10 for the remainder of the period. This behavior indicates improved collection efficiency over several quarters with some fluctuations possibly due to credit policy changes or customer payment behaviors.

Payables Turnover

Payables turnover also presents an increasing trend, moving from 8.63 to a high of around 12.94 by early 2023. Subsequent quarters show a decline followed by stabilization around 9 to 10 near the end of the data set. This pattern might reflect a tightening in payment policies followed by a return to a more normalized rate of supplier payments.

Working Capital Turnover

Working capital turnover ratios fluctuate significantly throughout the period. It starts near 24.25, peaks sharply to 36.88 in the first quarter of 2024, and then records very high values above 78 and 82 shortly after, before declining somewhat to 67.18. Such large variations indicate material shifts in working capital management efficiency or changes in sales volume relative to current assets and liabilities.

Average Inventory Processing Period

The average inventory processing period decreases consistently from 22 days early in the period to a low of around 13-14 days in early 2022. After this low, it settles in the range of 16 to 19 days through 2023 and into 2024, indicating more efficient inventory turnover in the earlier quarters followed by a modest lengthening of inventory holding time later in the period.

Average Receivable Collection Period

The receivable collection period shows some fluctuation. Starting near 44 days, it rises to a high of 54 days in mid-2020 before declining steadily to about 30 days by early 2022. Afterward, it increases a bit but remains generally between 33 and 40 days through 2023 and 2024, suggesting an overall improvement in receivables collection speed, though with some recent easing.

Operating Cycle

The operating cycle, representing the total time for converting inventory and receivables into cash, shortens from 66 days early on to about 50 days in early 2022. It then fluctuates between 53 and 57 days for most of 2023 and 2024, indicative of greater operational efficiency compared to the initial periods, although no further significant shortening is observed in the later quarters.

Average Payables Payment Period

The payables payment period exhibits a general downward trend over the timeline. From 42 days initially, it rises somewhat to highs around 49 days in mid-2020, then steadily declines to about 29 days in early 2022. Subsequently, it fluctuates between approximately 36 and 40 days, suggesting the company is paying suppliers relatively faster relative to earlier years but stabilizing to a moderate payment term length more recently.

Cash Conversion Cycle

The cash conversion cycle, a key measure of liquidity efficiency, improves from roughly 24 days to a low near 14 days by early 2024. The cycle then remains fairly stable around 14 to 18 days through the last quarters reported. This indicates enhanced cash flow management and reduced working capital tied up in operations, with consistent efficiency gains sustained over the latter part of the period analyzed.

The quarterly financial data reveals notable trends in sales and operating revenues, inventories, and inventory turnover ratios over the observed periods. Sales and operating revenues demonstrate a significant decline during early 2020, reaching a low in the second quarter of 2020, likely reflecting external economic pressures. Subsequently, revenues show a consistent recovery and growth trend from the third quarter of 2020 through 2022, peaking around mid to late 2022. After this peak, revenues exhibit a gradual downward trend starting in the first quarter of 2023, continuing through mid-2025, indicating a phase of contraction or stabilization at a lower level.

Inventories follow a somewhat parallel yet distinct trajectory. Initial levels in early 2020 start moderately high, with a slight dip in mid-2020. From late 2020 onwards, inventory levels rise steadily, reaching their highest points between late 2022 and mid-2024. This suggests accumulation or stockpiling during this period. Toward the end of the timeline, inventories experience a mild decline but remain relatively elevated compared to early 2020 figures, indicating maintained inventory holdings despite fluctuations in sales.

Inventory turnover ratios remain absent from data until the latter part of 2020, thereafter presenting a clear upward trend until around early 2023. Ratios increase from approximately 16.64 to peaks above 28.58, implying improved efficiency in converting inventory into sales during this interval. However, after peaking, the turnover ratio shows a downward adjustment, declining gradually but stabilizing in the range of 19 to 21 towards mid-2025. This pattern suggests that while inventory management efficiency initially increased, it faced some decline or normalization in later periods.

Sales and Other Operating Revenues

Displayed a sharp drop in early 2020, followed by robust recovery and growth through 2022, peaking mid-2022, and then a gradual decline starting 2023 into 2025.

Inventories

Experienced modest fluctuation early on, with steady increases beginning late 2020 and peaking between late 2022 and mid-2024, followed by a slight reduction but remaining elevated relative to early 2020 levels.

Inventory Turnover Ratios

Absent in early data, then steadily increased from late 2020 through early 2023, indicating greater inventory efficiency, before a moderate decline and stabilization through mid-2025.

Overall, the data suggests an initial economic disruption impacting sales and inventory, followed by a recovery phase with improved inventory management. The subsequent period shows signs of reduced sales momentum and a modest easing in inventory turnover, potentially reflecting a market adjustment or strategic inventory decisions.

Sales and other operating revenues

The revenues demonstrate considerable volatility throughout the observed periods. There was a significant decline from March 2020 (29,705 million USD) to June 2020 (15,926 million USD), which likely reflects external adverse conditions impacting sales. Subsequently, a recovery trend is noted, with revenues increasing steadily through 2021, reaching a peak in June 2022 (65,372 million USD). After this peak, revenues decline gradually in the later quarters, reaching approximately 44,375 million USD by June 2025. This pattern suggests cyclical influences with an overall recovery after the early 2020 decline, followed by stabilization at a lower level compared to the peak.

Accounts and notes receivable, less allowance

The accounts and notes receivable generally increased from March 2020 through June 2022, peaking at 26,860 million USD. This increase correlates with the revenue growth during this timeframe, implying higher sales volumes and related receivables. After June 2022, receivables began to decrease gradually, reaching 17,663 million USD by June 2025. This reduction in receivables aligns with the downward trend seen in revenues during the same period, indicating tighter credit management or decreased sales volume.

Receivables turnover ratio

The receivables turnover ratio was not available for early periods but shows a generally increasing trend from the third quarter of 2020 (8.24) to the last reported periods in 2025, fluctuating around 9 to 11 times per year. The ratio peaked at 12.21 in September 2022, indicating efficient collection during the time of high revenues. Following this peak, the ratio declined somewhat but remained relatively stable above 9, suggesting consistent effectiveness in collecting receivables relative to sales despite fluctuations in revenue and receivables balances.

Sales and Other Operating Revenues

The sales and other operating revenues experienced substantial volatility over the analyzed quarters. Initially, there was a sharp decline from 29,705 million USD in March 2020 to 15,926 million USD in June 2020, likely influenced by external market disruptions. This was followed by a recovery phase, reaching a peak of 65,372 million USD in June 2022. Subsequently, the revenues demonstrated a declining trend from mid-2022 through subsequent quarters, falling to 44,375 million USD by June 2025. The fluctuations throughout the periods indicate sensitivity to market conditions, with a notable recovery phase ending by mid-2022 and a gradual downward adjustment thereafter.

Accounts Payable

Accounts payable mirrored similar trends to revenues but showed a generally upward trajectory until mid-2022. Starting at 11,006 million USD in March 2020, the payables increased steadily to peak at 24,906 million USD in June 2022, suggesting an expansion in purchasing or operational activity during this period. After June 2022, accounts payable diminished progressively to 18,609 million USD by June 2025, indicating either reduced credit purchases or improved payment cycles in later years.

Payables Turnover Ratio

The payables turnover ratio, available from September 2020 onward, started at 8.63 and showed an overall upward trend until the fourth quarter of 2022, peaking at 12.94. This suggests an acceleration in the rate at which accounts payable were settled during that timeframe. Following this peak, the ratio trended downwards and stabilized around a ratio between 9 and 10 through mid-2025. The initial increase indicates improved liquidity or faster payment processes, while the moderation in subsequent periods points to stabilization of payment terms or operational practices.

Summary of Observations

The data reveals a period of significant disruption in early 2020, reflected by reduced revenues and accounts payable, followed by a robust recovery reaching a peak in mid-2022. Post peak, there is a gradual reduction in both sales revenues and payables, suggesting either market consolidation, cost control measures, or adjusting demand. The payables turnover ratio's increase and subsequent stabilization implies an initial push towards quicker payments with a return to steady-state payment terms thereafter. Overall, the financial metrics indicate responsiveness to market dynamics and operational adjustments across the quarters analyzed.

Working Capital

Working capital demonstrated significant volatility over the observed quarterly periods. Starting from a modest level of 327 million USD in the first quarter of 2020, it surged dramatically, reaching its peak near 16.1 billion USD by the fourth quarter of 2022. Following this peak, a downward trend was noted, with working capital decreasing to negative territory (-136 million USD) by the second quarter of 2025. This decline after 2022 suggests tightening liquidity or increased short-term obligations relative to current assets.

Sales and Other Operating Revenues

Sales revenues exhibited an overall upward trend from early 2020 through 2022, rising from approximately 29.7 billion USD in the first quarter of 2020 to a maximum near 65.4 billion USD by mid-2022. However, post this peak, the revenue figures displayed a generally declining pattern through to mid-2025, falling back to approximately 44.4 billion USD. This pattern indicates initial growth and recovery, possibly linked to economic conditions and commodity prices, followed by a period of contraction or market pressure.

Working Capital Turnover

The working capital turnover ratio was absent in early 2020 but began to be recorded from the third quarter of 2020. This ratio reflected notable fluctuations, with values ranging broadly—from around 13.1 up to over 82 by mid-2025. Early in the data series, the turnover ratio was moderate, clustering between 14 and 25 for much of 2021 and 2022. A sharp increase was apparent in 2024 and continued through early 2025, coinciding with the sharp decline in working capital. The elevation in turnover during this period implies higher efficiency in using working capital to generate sales, but it may also reflect working capital constraints.

General Observations

The data reveal a company experiencing substantial changes in liquidity and revenue over the five-year span. The initial increase in working capital and revenues points to a growth and strengthening phase, followed by contraction in both areas from late 2022 onwards. Meanwhile, the working capital turnover ratio's sharp rise in the latter period suggests enhanced operational efficiency or reduced liquidity, necessitating careful monitoring. These trends could be influenced by external market conditions, commodity price volatility, or strategic changes impacting operational and financial management.

The inventory turnover ratio presents a clear evolving trend over the observed periods. Starting from a missing data phase in early 2020, the ratio begins at 16.64 in March 2021 and generally exhibits an upward trajectory, peaking at 28.58 in March 2023. Following this peak, the turnover ratio gradually declines, stabilizing in the range of approximately 18.8 to 22.86 during 2023 and 2024, and maintaining a similar level into mid-2025.

Correspondingly, the average inventory processing period, expressed in number of days, exhibits an inverse relationship with the inventory turnover ratio. Beginning at 22 days in March 2021, the processing period decreases consistently, reaching its lowest point of 13 days by March 2022 and remaining low through late 2022 and early 2023. Subsequent quarters show a moderate increase in this period, fluctuating around 15 to 17 days through 2023 and 2024, and stabilizing near 17 days into mid-2025.

Inventory Turnover Ratio Analysis

The initial increasing trend suggests an improvement in inventory management efficiency, with assets moving faster through the sales cycle until early 2023.

The peak in March 2023 indicates the highest efficiency in converting inventory to sales within the timeframe observed.

The gradual decline post-peak may reflect a normalization or strategic adjustment in inventory policies or market conditions that reduced the pace of inventory turnover.

The stabilization around the low twenties in subsequent periods suggests a new steady-state performance level in inventory turnover.

Average Inventory Processing Period Analysis

The decreasing number of days to reach a low in early 2023 aligns with the increased turnover ratio, confirming faster processing of inventory.

The subsequent increase in processing days indicates a slowdown in inventory movement, consistent with the observed reduction in turnover ratio.

The steadiness around 17 days in the later periods suggests an established balance between inventory holding and sales fulfillment timelines.

Overall, the data reflects a period of enhanced inventory turnover efficiency reaching a peak in early 2023, followed by a phase of moderate deceleration and stabilization. This suggests adaptive inventory management responsive to operational or market changes while maintaining a controlled and consistent approach in later periods.

Receivables Turnover Ratio

The receivables turnover ratio exhibits a general upward trend from 2020 through mid-2023, increasing from 6.79 in June 2020 to a peak of 12.21 in September 2022. This suggests an improvement in the company's efficiency in collecting receivables during this period. After reaching this peak, the ratio declines somewhat, stabilizing around the 9 to 10 range in 2024 and early 2025, indicating a slight reduction in collection efficiency but remaining at a healthy level.

Average Receivable Collection Period

The average receivable collection period, which is inversely related to the receivables turnover ratio, follows a corresponding downward trend from June 2020 onward. Initially at 54 days in June 2020, the collection period decreases significantly to as low as 30 days in September 2022, correlating with the peak in turnover ratio. Following this low point, the collection period slightly increases to stabilize around 37 to 40 days during 2023 and 2024, before a further decrease to approximately 34 days by mid-2025.

Overall Assessment

The data shows that the company significantly improved its receivables management efficiency between mid-2020 and late 2022, as evidenced by a higher turnover ratio and reduced collection days. More recently, there has been some moderation in this trend, with slight increases in collection days and decreases in turnover, yet still maintaining improved levels compared to the earlier period. This pattern suggests effective credit policies and collection efforts, with a potential focus on sustaining these improvements and managing any factors that may impact receivables turnover going forward.

The analysis of the quarterly financial periods reveals notable dynamics in the inventory processing, receivable collection, and operating cycle durations over the observed timeline.

Average Inventory Processing Period

The inventory processing period shows a clear decreasing trend from March 2021 through June 2022, starting at 22 days and reaching a low of 13 days, indicative of improved efficiency in inventory turnover. From this point onward, fluctuations are apparent, with minor variations between 13 and 19 days. In particular, there is a rise to 17 days by December 2023, followed by a slight increase and then stabilization around 17 days at the end of the period. This suggests that while the company initially enhanced inventory management, recent periods indicate a modest elongation but overall stability in processing time.

Average Receivable Collection Period

The collection period for receivables presents a more volatile pattern. Starting at 44 days in March 2021, it increases to 54 days by June 2021, suggesting a slower cash conversion from sales. Thereafter, the metric oscillates with periods of improvement and deterioration, reaching a trough of 30 days in March 2023 but rising again to 40 days by December 2023. The latter periods show a moderate downward adjustment, ending at 34 days in June 2025. This volatility may reflect changing credit policies, customer payment behavior, or external economic factors affecting collections.

Operating Cycle

The operating cycle, which combines inventory processing and receivable collection periods, follows a somewhat parallel yet smoother trajectory. It peaks at 75 days in June 2021, corresponding with peaks in both sub-components, then declines steadily to 45 days by March 2023. The cycle exhibits a slight upward movement to 57 days at the end of 2023, before reducing toward 51 days by mid-2025. The overall trend indicates an improvement in the company’s operational efficiency in managing the conversion of resources into cash, despite some intermittent increases in cycle time.

In summary, the data points to significant improvements in inventory management and overall operating efficiency during early periods, followed by some volatility and stabilization in later quarters. The receivable collection period displays greater fluctuation, suggesting variable influences on collections. The operating cycle trends suggest the company has managed to reduce tied-up capital in operations over time, enhancing liquidity and operational responsiveness.

Payables Turnover

The payables turnover ratio shows a general upward trend from March 31, 2021, reaching a peak of 12.94 by September 30, 2023. This indicates an improvement in the efficiency of paying suppliers over time. However, after this peak, the ratio declines to 9.16 by December 31, 2023, before stabilizing around values between 8.76 and 10.09 during the periods extending to June 30, 2025. The fluctuations suggest periodic changes in payables management or supplier credit terms.

Average Payables Payment Period

This metric inversely correlates with the payables turnover ratio. It decreases from 42 days on March 31, 2021, to a low of 28 days by June 30, 2023, indicating faster payments to suppliers. Subsequently, the period increases again, reaching 42 days by March 31, 2025, before decreasing to 36 days by June 30, 2025. The variability reflects changing payment policies or cash flow management strategies over the time horizon analyzed.

Overall Insights

The data overall suggests that the company had progressively improved its payable payment efficiency up to mid-2023, as evidenced by higher payables turnover and shorter payment periods. The subsequent reversal and oscillation in these metrics may imply adjustments in working capital management in response to operational demands or external economic factors. The payment period remained within a relatively narrow range around 30 to forty-two days, consistent with industry norms for maintaining supplier relationships while optimizing cash flows.

Average inventory processing period

The average inventory processing period shows a clear downward trend from March 2021 through March 2024, declining from 22 days to 16-17 days. This indicates an improvement in inventory turnover, meaning inventory is being processed more quickly over time. However, there is a slight increase in the latter quarters of 2023 and early 2024, with values rising to 19 days, before stabilizing again around 17 days by mid-2025.

Average receivable collection period

The average receivable collection period exhibits notable fluctuations without a consistent steady trend. It starts at 44 days in March 2021 and peaks at 54 days in June 2021, followed by a general decrease towards a low of 30-33 days in late 2022 and early 2023. Afterward, it increases somewhat again, fluctuating between 34 and 40 days through 2023 and 2024, and slightly declining to 34 days by mid-2025. This pattern indicates variability in the timing of cash collections from customers.

Average payables payment period

The average payables payment period also demonstrates considerable variability. Beginning at 42 days in March 2021, it rises to 49 days by June 2021, then declines steadily to 28-29 days by late 2022. Following that, it increases somewhat in 2023, fluctuating around 38-40 days, and then shows a decreasing trend again towards mid-2025, reaching 36 days. This suggests changing management of payment timings to suppliers over the observed period.

Cash conversion cycle

The cash conversion cycle follows a generally decreasing trend from March 2021 (24 days) to a low of 14 days by June 2025, indicating an improvement in the overall working capital cycle efficiency. Some fluctuations are visible, with values ranging between 14 and 26 days, but the latest periods show it stabilizing around 15 days. This improvement suggests enhanced coordination of inventory management, receivables collection, and payables payment processes.