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)
ConocoPhillips, 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 increased significantly from 18.75 in 2020 to a peak of 64.39 in 2022, indicating a much faster rate of selling and replenishing inventory during that period. However, this ratio declined subsequently to 30.26 by 2024, though it remained notably higher than the 2020 level, suggesting some normalization in inventory management.
- Receivables Turnover
- Receivables turnover remained relatively stable around 7.0 in 2020 and 2021, before rising sharply to 11.09 in 2022. This higher turnover rate was maintained into 2023 but decreased to 8.27 in 2024, pointing to improved collections initially followed by a slight slowdown.
- Payables Turnover
- The payables turnover ratio showed a clear upward trend from 7.04 in 2020 to a high of 12.84 in 2022. It then fell to 9.14 by 2024, indicating that the company paid its suppliers more quickly up to 2022 but extended its payment periods somewhat thereafter.
- Working Capital Turnover
- The working capital turnover ratio rose sharply from 2.8 in 2020 to 13.3 in 2022, suggesting much more efficient use of working capital. This elevated level was sustained through 2023 and further improved to 15.54 in 2024, highlighting a consistent enhancement in generating sales from working capital.
- Average Inventory Processing Period
- This metric decreased from 19 days in 2020 to a low of 6 days in 2022, reflecting faster inventory turnover and reduced holding times. It increased thereafter to 12 days in 2024, implying a slight lengthening of inventory processing but remaining below the 2020 level.
- Average Receivable Collection Period
- The average collection period was relatively stable at around 51-52 days in 2020 and 2021, before dropping markedly to 33 days in 2022. It lengthened slightly to 44 days by 2024 but stayed below the initial levels, consistent with improved efficiency in receivables management overall.
- Operating Cycle
- The operating cycle shortened substantially from 70 days in 2020 to 39 days in 2022, indicating faster conversion of raw materials into cash. It then lengthened to 56 days in 2024, although it remained shorter than at the start of the period, implying a sustained improvement.
- Average Payables Payment Period
- The payables period decreased from 52 days in 2020 to 28 days in 2022, showing quicker payments to suppliers. This period increased back to 40 days in 2024, indicating a return toward a longer payment cycle but still below the original level.
- Cash Conversion Cycle
- The cash conversion cycle fluctuated around low values: it initially increased from 18 days in 2020 to 22 days in 2021, then fell sharply to 11 days in 2022. It slightly rose to 16 days by 2024. These changes reveal generally efficient cash flow management with some variability across the years.
Turnover Ratios
Average No. Days
Inventory Turnover
ConocoPhillips, 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 | 54,745) | 56,141) | 78,494) | 45,828) | 18,784) | |
| Inventories | 1,809) | 1,398) | 1,219) | 1,208) | 1,002) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 30.26 | 40.16 | 64.39 | 37.94 | 18.75 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Chevron Corp. | 21.32 | 22.86 | 28.58 | 24.68 | 16.64 | |
| 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
= 54,745 ÷ 1,809 = 30.26
2 Click competitor name to see calculations.
An analysis of the provided financial data reveals several notable trends over the five-year period from 2020 to 2024.
- Sales and other operating revenues
- The sales and other operating revenues demonstrated substantial growth from 2020 to 2022, increasing from 18,784 million US dollars in 2020 to 78,494 million US dollars in 2022. This represents more than a fourfold increase over a two-year period. However, following this peak in 2022, revenues declined significantly to 56,141 million US dollars in 2023 and further slightly to 54,745 million US dollars in 2024. Despite the decline, the revenues in 2023 and 2024 remained substantially higher than the 2020 level.
- Inventories
- Inventories exhibited a generally rising trend across the entire period. The inventory value increased gradually from 1,002 million US dollars in 2020 to 1,219 million US dollars in 2022, followed by a more pronounced rise to 1,398 million US dollars in 2023, and a significant increase to 1,809 million US dollars in 2024. This steady growth in inventories may suggest accumulation of stock or higher inventory costs over time.
- Inventory turnover ratio
- The inventory turnover ratio experienced considerable fluctuations over the period. It started at 18.75 in 2020, then sharply increased to 37.94 in 2021, and peaked at 64.39 in 2022. After this peak, the ratio declined to 40.16 in 2023 and further dropped to 30.26 in 2024. The initial increase indicates improved efficiency in managing and selling inventory during the early years, while the subsequent decline suggests a reduction in turnover speed, potentially aligned with the revenue decreases observed during the same period.
Overall, the data shows a strong growth phase in sales and inventory efficiency up to 2022, followed by a contraction in both revenues and inventory turnover while inventories continued to accumulate. This pattern could imply challenges in sales demand or inventory management efficiency after 2022.
Receivables Turnover
ConocoPhillips, 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 | 54,745) | 56,141) | 78,494) | 45,828) | 18,784) | |
| Accounts and notes receivable, net of allowance | 6,621) | 5,461) | 7,075) | 6,543) | 2,634) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 8.27 | 10.28 | 11.09 | 7.00 | 7.13 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Chevron Corp. | 9.35 | 9.88 | 11.52 | 8.45 | 8.24 | |
| 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, net of allowance
= 54,745 ÷ 6,621 = 8.27
2 Click competitor name to see calculations.
- Sales and Other Operating Revenues
- The sales and other operating revenues demonstrated significant volatility over the observed periods. Starting at 18,784 million US dollars at the end of 2020, the revenue sharply increased to 45,828 million in 2021 and further surged to a peak of 78,494 million in 2022. However, this was followed by a marked decline in 2023 to 56,141 million and a slight decrease in 2024 to 54,745 million. This pattern indicates strong growth in the initial years, possibly driven by market expansion or favorable conditions, with a subsequent reduction that could suggest market corrections, lower demand, or operational challenges.
- Accounts and Notes Receivable, Net of Allowance
- The net accounts and notes receivable also fluctuated but with less pronounced amplitude compared to revenues. Starting at 2,634 million US dollars at the end of 2020, the receivables increased to 6,543 million in 2021 and slightly grew to 7,075 million in 2022. A decline occurred in 2023 to 5,461 million followed by a rebound to 6,621 million in 2024. This trend reflects shifts in credit sales or collection efficiency, with the receivables generally moving in line with revenue changes but with a lag in recovery.
- Receivables Turnover Ratio
- The receivables turnover ratio exhibited variability over the years, beginning at 7.13 in 2020 and slightly decreasing to 7.00 in 2021. A substantial increase was observed in 2022, reaching 11.09, followed by a decrease to 10.28 in 2023 and a further decline to 8.27 in 2024. Higher turnover ratios in 2022 and 2023 indicate faster collection of receivables relative to sales, which may reflect stronger credit controls or improved collection practices during periods of high sales. The drop in 2024 suggests a reduction in collection efficiency or extended credit terms despite relatively stable sales levels.
Payables Turnover
ConocoPhillips, 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 | 54,745) | 56,141) | 78,494) | 45,828) | 18,784) | |
| Accounts payable | 5,987) | 5,083) | 6,113) | 5,002) | 2,669) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 9.14 | 11.04 | 12.84 | 9.16 | 7.04 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Chevron Corp. | 8.76 | 9.64 | 12.44 | 9.46 | 8.63 | |
| 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
= 54,745 ÷ 5,987 = 9.14
2 Click competitor name to see calculations.
- Sales and Other Operating Revenues
- The sales and operating revenues exhibited a significant increase from 2020 to 2022, rising sharply from 18,784 million US dollars in 2020 to a peak of 78,494 million US dollars in 2022. However, after 2022, the revenues declined notably to 56,141 million US dollars in 2023 and further slightly decreased to 54,745 million US dollars in 2024. This pattern suggests a strong growth phase that was followed by a contraction over the subsequent two years.
- Accounts Payable
- Accounts payable showed an upward trend from 2020 through 2022, increasing from 2,669 million US dollars to 6,113 million US dollars. In 2023, this figure decreased to 5,083 million US dollars but then rebounded to 5,987 million US dollars in 2024. Overall, accounts payable presented variability but generally higher levels compared to 2020, indicating fluctuations in short-term obligations.
- Payables Turnover Ratio
- The payables turnover ratio, which measures the efficiency in managing accounts payable, increased substantially from 7.04 in 2020 to a peak of 12.84 in 2022, indicating faster payment to suppliers during this period. This was followed by a decline to 11.04 in 2023 and a further decrease to 9.14 in 2024, pointing to a gradual reduction in payment velocity, though the ratio remained higher than in 2020 and 2021.
- Summary of Observed Trends
- The financial data indicates a phase of rapid revenue growth culminating in 2022, accompanied by increased accounts payable and more efficient payment management as reflected by the payables turnover ratio. Post-2022, the company experienced declining revenues alongside fluctuating but generally elevated accounts payable levels and a decreasing payables turnover ratio, suggesting adjustments in working capital management amid changing business conditions.
Working Capital Turnover
ConocoPhillips, 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 | 15,647) | 14,330) | 18,749) | 16,050) | 12,066) | |
| Less: Current liabilities | 12,124) | 10,005) | 12,847) | 12,021) | 5,366) | |
| Working capital | 3,523) | 4,325) | 5,902) | 4,029) | 6,700) | |
| Sales and other operating revenues | 54,745) | 56,141) | 78,494) | 45,828) | 18,784) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 15.54 | 12.98 | 13.30 | 11.37 | 2.80 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Chevron Corp. | 82.20 | 22.20 | 14.61 | 22.40 | 24.25 | |
| 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
= 54,745 ÷ 3,523 = 15.54
2 Click competitor name to see calculations.
- Working Capital
- Working capital exhibited fluctuations over the observed period. It initially decreased from 6,700 million US dollars at the end of 2020 to 4,029 million US dollars by the end of 2021. This was followed by a partial recovery to 5,902 million in 2022. Subsequently, the working capital decreased again during the last two years, reaching 3,523 million by the end of 2024. Overall, the trend indicates variability with a general decline from 2020 to 2024.
- Sales and Other Operating Revenues
- The sales and other operating revenues showed significant growth from 18,784 million US dollars in 2020 to a peak of 78,494 million in 2022. After this peak, revenues declined to 56,141 million in 2023 and slightly decreased again to 54,745 million by the end of 2024. This pattern suggests a strong upward momentum until 2022, followed by a notable contraction, potentially reflecting changes in market conditions or operational performance.
- Working Capital Turnover Ratio
- The working capital turnover ratio demonstrated a consistently increasing trend throughout the period. Starting at 2.8 in 2020, it rose sharply to 11.37 in 2021, then increased further to 13.3 in 2022. Although there was a marginal decline to 12.98 in 2023, the ratio rebounded to its highest level of 15.54 by the end of 2024. This indicates a progressively higher efficiency in generating sales relative to working capital, with a slight dip in 2023 before recovering.
- Summary
- The financial data indicates fluctuating working capital coupled with volatile revenue levels and an improving working capital turnover ratio over the five-year span. The working capital variations suggest challenges in maintaining liquidity or inventory management, whereas the elevated turnover ratio points to enhanced operational efficiency in utilizing available working capital to drive sales. The peak in revenues in 2022 followed by a decrease may suggest external market influences or internal shifts affecting overall income. The general trend illustrates a complex interplay between financial resources and sales performance requiring ongoing monitoring.
Average Inventory Processing Period
ConocoPhillips, 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 | 30.26 | 40.16 | 64.39 | 37.94 | 18.75 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 12 | 9 | 6 | 10 | 19 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Chevron Corp. | 17 | 16 | 13 | 15 | 22 | |
| 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 ÷ 30.26 = 12
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio exhibited significant volatility over the five-year period. Starting at 18.75 in 2020, it experienced a sharp increase to 37.94 in 2021 and peaked at 64.39 in 2022. Subsequently, the ratio declined to 40.16 in 2023 and further decreased to 30.26 by the end of 2024. This pattern suggests an initial acceleration in the frequency of inventory replacement, reaching a high point in 2022, followed by a moderated reduction in turnover activity in the subsequent years. The elevated turnover in 2022 might indicate heightened operational efficiency or increased sales activity during that year, whereas the decline afterwards could reflect adjustments in inventory management or market conditions.
- Average Inventory Processing Period
- The average number of days required to process inventory showed an inverse trend relative to the inventory turnover. Beginning at 19 days in 2020, the processing period decreased substantially to 10 days in 2021 and reached its shortest duration of 6 days in 2022. After this trough, the period lengthened to 9 days in 2023 and further extended to 12 days by 2024. The reduction in processing time up to 2022 aligns with the higher inventory turnover rates seen earlier, indicating improved turnover efficiency and faster inventory cycles during that period. The subsequent increase in days suggests a slowing of inventory processing, corresponding with the reduced turnover ratios observed, which may indicate changing operational efficiencies or shifts in inventory management strategies.
Average Receivable Collection Period
ConocoPhillips, 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 | 8.27 | 10.28 | 11.09 | 7.00 | 7.13 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 44 | 36 | 33 | 52 | 51 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Chevron Corp. | 39 | 37 | 32 | 43 | 44 | |
| 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 ÷ 8.27 = 44
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio experienced an initial slight decline from 7.13 in 2020 to 7.00 in 2021, indicating a marginal slowdown in the frequency of receivables collections during that period. However, a significant improvement occurred in 2022, with the ratio increasing sharply to 11.09, reflecting a much faster conversion of receivables to cash. This enhanced efficiency slightly declined in 2023 to 10.28 and further decreased to 8.27 in 2024, although the turnover ratio remained above the levels observed in 2020 and 2021.
- Average Receivable Collection Period
- The average receivable collection period, expressed in number of days, moved inversely to the receivables turnover, as expected. It slightly lengthened from 51 days in 2020 to 52 days in 2021, suggesting a marginal delay in collection times. This period then contracted significantly to 33 days in 2022, demonstrating a marked increase in collection efficiency and alignment with the peak receivables turnover. In the subsequent years, the collection period modestly increased to 36 days in 2023 and further to 44 days in 2024. Despite this rise, the days outstanding remained substantially lower than at the beginning of the period evaluated.
- Overall Trend and Insights
- Over the five-year span, the data reveals cyclical fluctuations in the efficiency of receivables management. Notably, 2022 represented a peak in collection performance, with the highest turnover and shortest collection period, indicative of enhanced liquidity management or more stringent credit policies. The subsequent decline in turnover and slight increase in collection days in 2023 and 2024 may warrant monitoring to identify underlying causes and prevent potential liquidity constraints. Nevertheless, the overall improvement compared to 2020 and 2021 suggests progress in optimizing working capital management.
Operating Cycle
ConocoPhillips, 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 | 12 | 9 | 6 | 10 | 19 | |
| Average receivable collection period | 44 | 36 | 33 | 52 | 51 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 56 | 45 | 39 | 62 | 70 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Chevron Corp. | 56 | 53 | 45 | 58 | 66 | |
| 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
= 12 + 44 = 56
2 Click competitor name to see calculations.
- Inventory Processing Period
- The inventory processing period decreased significantly from 19 days in 2020 to 6 days in 2022, indicating an improvement in inventory turnover efficiency during this period. However, it increased slightly to 9 days in 2023 and further to 12 days in 2024, suggesting a partial reversal of the earlier efficiency gains.
- Receivable Collection Period
- The average receivable collection period remained relatively stable around 51-52 days in 2020 and 2021 but showed a marked improvement in 2022, dropping to 33 days. This indicates quicker cash inflow from receivables that year. It then increased moderately to 36 days in 2023 and further to 44 days in 2024, indicating a trend towards slower collection compared to the peak efficiency year of 2022.
- Operating Cycle
- The operating cycle, which combines the inventory processing and receivable collection periods, shortened notably from 70 days in 2020 to 39 days in 2022, reflecting enhanced overall operational efficiency. However, it expanded again to 45 days in 2023 and increased further to 56 days in 2024, demonstrating a gradual lengthening of the cycle after 2022.
- Summary
- Overall, the data reveals a trend of improved operational efficiency culminating in 2022, with shorter periods for inventory processing, receivable collection, and the total operating cycle. Following 2022, there is a moderate decline in this efficiency as these periods lengthen again in 2023 and 2024. This suggests that while the company made significant gains in working capital management during the earlier part of the period, these gains were somewhat eroded in the latter years.
Average Payables Payment Period
ConocoPhillips, 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 | 9.14 | 11.04 | 12.84 | 9.16 | 7.04 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 40 | 33 | 28 | 40 | 52 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Chevron Corp. | 42 | 38 | 29 | 39 | 42 | |
| 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 ÷ 9.14 = 40
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio exhibited a notable increase from 7.04 in 2020 to a peak of 12.84 in 2022, indicating an accelerated rate at which payables were settled during this period. However, following this peak, the ratio declined to 11.04 in 2023 and further to 9.14 in 2024. This downward trend suggests a slowdown in payment frequency after 2022, though the ratio remained higher in 2024 than at the start of the period in 2020.
- Average Payables Payment Period
- The average payables payment period decreased significantly from 52 days in 2020 to 28 days in 2022, demonstrating a faster settlement of payables aligned with the increase in payables turnover. After reaching this low point in 2022, the payment period increased to 33 days in 2023 and further reverted to 40 days in 2024. This elongation in payment duration corresponds with the declining payables turnover ratio in the latter years.
- Overall Observations
- The data indicates a general trend of intensifying payment activity culminating in 2022, followed by a moderation phase in 2023 and 2024. The reversal in the trends of payables turnover and payment period suggests a strategic or operational shift towards slightly extended payables management timelines after 2022, which may impact the company's cash flow or supplier relationships. Despite this, payables payment efficiency remains improved relative to the 2020 baseline.
Cash Conversion Cycle
ConocoPhillips, 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 | 12 | 9 | 6 | 10 | 19 | |
| Average receivable collection period | 44 | 36 | 33 | 52 | 51 | |
| Average payables payment period | 40 | 33 | 28 | 40 | 52 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 16 | 12 | 11 | 22 | 18 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Chevron Corp. | 14 | 15 | 16 | 19 | 24 | |
| 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
= 12 + 44 – 40 = 16
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period showed a marked decrease from 19 days in 2020 to a low of 6 days in 2022, indicating a significant improvement in inventory turnover efficiency. However, the period then increased slightly to 9 days in 2023 and further to 12 days in 2024, suggesting a partial reversal of this trend.
- Average Receivable Collection Period
- The average receivable collection period remained relatively stable between 51 and 52 days in 2020 and 2021, respectively, followed by a sharp reduction to 33 days in 2022. Post-2022, the collection period lengthened to 36 days in 2023 and reached 44 days in 2024, indicating a gradual extension in the time taken to collect receivables.
- Average Payables Payment Period
- The payment period for payables exhibited a consistent decline from 52 days in 2020 to 28 days in 2022, reflecting faster payment to suppliers. Subsequently, the period increased to 33 days in 2023 and further to 40 days in 2024, highlighting a moderation in payment speed but still below the initial 2020 level.
- Cash Conversion Cycle
- The cash conversion cycle fluctuated over the period, starting at 18 days in 2020, rising slightly to 22 days in 2021, and then dropping to a low of 11 days in 2022. The cycle lengthened somewhat in the following years to 12 days in 2023 and 16 days in 2024. Overall, the cycle remained shorter in the later years compared to the initial periods, suggesting improved efficiency in managing working capital.
- Summary
- Overall, the company demonstrated notable improvements in working capital management between 2020 and 2022, with reductions in inventory processing, receivable collection, and payables payment periods contributing to a shorter cash conversion cycle. From 2023 onwards, slight reversals in these trends indicate some easing in operational efficiency, although the working capital cycle remains more efficient compared to the initial years. The fluctuations suggest adaptive management to changing operational or market conditions.