ConocoPhillips (NYSE:COP)

Inventory turnover

The inventory turnover ratio shows an overall increasing trend from early 2021 through the end of 2022, rising from 20.45 to a peak of 64.39. This indicates an improvement in inventory management and faster stock movement during this period. However, starting in 2023, the turnover ratio declines steadily, reaching around 30 to 35 by late 2025, suggesting a slowdown in inventory turnover and possibly increased inventory holding times.

Receivables turnover

The receivables turnover ratio demonstrates substantial growth from approximately 5 in early 2021 to a high of 14.73 in mid-2023. This indicates more efficient collection processes and quicker conversion of receivables into cash. After mid-2023, the ratio decreases somewhat but remains relatively stable around 10 in late 2025, reflecting a slight relaxation of collection efficiency but still at an improved level compared to 2021.

Payables turnover

The payables turnover ratio steadily rises from about 6 in the first quarter of 2021 to a high of 14.81 by early 2023, signaling that the company is paying suppliers more quickly. From mid-2023 onward, the ratio decreases, falling to around 9 by late 2025, which may indicate longer payment terms or slower payments to suppliers in recent periods.

Working capital turnover

Working capital turnover exhibits significant variability, with a marked increase from 3.02 in early 2021 to a peak of 16.88 in mid-2023. This suggests enhanced efficiency in utilizing working capital to generate sales during this timeframe. Although the ratio decreases around mid-2023, it again increases towards the end of the period, reaching approximately 19.57 in late 2025, reflecting sustained operational efficiency gains overall.

Average inventory processing period

The average time to process inventory decreases sharply from 18 days in early 2021 to 6 days in late 2021 and remains low through 2022. Starting in 2023, this period gradually rises to around 12 days by late 2025, indicating that the speed of inventory turnover slowed after reaching a low point, but remains improved relative to early 2021.

Average receivable collection period

The average receivable collection days shortened considerably from 73 days in early 2021 to about 25 days by mid-2023, reflecting improved collections and cash flow management. From mid-2023 to late 2025, the period lengthens somewhat, fluctuating between 32 and 45 days, which may signal more relaxed credit policies or challenges in collections.

Operating cycle

The operating cycle interval narrows substantially from 91 days in the first quarter of 2021 to approximately 32 days in early 2023, demonstrating enhanced operational efficiency in managing inventories and receivables. A slight increase to around 46 days is observed by late 2025, suggesting some modest lengthening of the cycle, but it remains below historical levels.

Average payables payment period

The average days to pay suppliers decreased from 62 days in early 2021 to 25 days by early 2023, indicating faster payments and potentially strengthened supplier relationships. Subsequently, this period lengthens to about 47 days by mid-2025 before contracting slightly, which could imply a strategic extension of payment terms to manage cash flow.

Cash conversion cycle

The cash conversion cycle improves significantly, reducing from 29 days in early 2021 to a low of 6–8 days in late 2025. This trend reflects improved liquidity management and quicker conversion of resources into cash, despite some fluctuations. The overall reduction in this cycle duration signals enhanced efficiency in managing receivables, inventory, and payables collectively.

Over the analyzed periods, sales and other operating revenues exhibit notable fluctuations, with an overall upward trajectory peaking around mid-2022 before experiencing a decline in subsequent quarters. Specifically, revenues increased from approximately 9.8 billion US dollars in the first quarter of 2021 to a peak exceeding 21 billion US dollars in the mid-2022 quarters. However, from late 2022 through 2023 and into early 2024, revenues show a declining trend with some minor recovery fluctuations, indicating variable market conditions or operational factors affecting sales.

Inventories show a steady and consistent increase over the entire period. Starting at around 1.1 billion US dollars in early 2021, inventory levels gradually grow, reaching values close to 1.9 billion US dollars by late 2024, with a slight reduction noted toward early 2025. This upward trend in inventory could suggest accumulation tactics, stockpiling in anticipation of demand, or supply chain dynamics affecting inventory management.

The inventory turnover ratio provides insights complementary to inventory and sales performance. Initially, the ratio rises significantly from approximately 20 times in early 2021 to a peak above 64 times by late 2022. This sharp increase implies improved efficiency in inventory management relative to sales during this period. Subsequently, the ratio experiences a decline, falling to around 30 times in the latest quarters observed. This decrease coincides with the reduction in sales and continued high inventory levels, potentially indicating slower movement of stock or diminishing sales velocity relative to inventory on hand.

Sales and Other Operating Revenues

Show strong growth through 2021 to mid-2022, followed by a downward adjustment with partial recovery towards late 2024.

Inventories

Exhibit a consistent and steady upward trend, suggesting accumulation or slower turnover, peaking in late 2024 with a minor reduction afterwards.

Inventory Turnover Ratio

Increases sharply until late 2022, signaling efficient inventory use, then declines notably, reflecting decreased efficiency or slower sales relative to inventory.

In summary, the data indicates a period of strong revenue growth accompanied by efficient inventory management until late 2022, after which sales contraction and rising inventories contribute to reduced inventory turnover efficiency. This pattern may imply challenges in aligning inventory levels with sales demand in later periods.

Analysis of the quarterly financial data reveals several notable trends in the key operational metrics over the reported periods.

Sales and Other Operating Revenues

Revenues exhibited a general uptrend from early 2021 through mid-2022, reaching a peak in June 2022. This period saw an increase from approximately 9.8 billion USD to over 21 billion USD. Thereafter, revenues declined substantially by the end of 2022 and continued to fluctuate through 2023 and 2024, with values mostly ranging between 13 billion and 15 billion USD. A noticeable recovery in revenue is observed in the first quarter of 2025, with sales increasing to around 16.5 billion USD before slightly decreasing again in subsequent quarters.

Accounts and Notes Receivable, Net of Allowance

The net receivables showed a steady increase from the start of 2021, peaking in the first half of 2022 near 8.2 billion USD. This was followed by a decline throughout late 2022 and early 2023, reaching a nadir below 4.8 billion USD by the third quarter of 2024. The latter part of 2024 and into 2025 saw a moderate increase again, with values rising to around 6.4 billion USD before stabilizing near 5.7 billion USD.

Receivables Turnover Ratio

The receivables turnover ratio demonstrated a consistent upward trajectory with minor fluctuations, increasing from about 5.0 times in early 2021 to a peak of approximately 14.7 times by mid-2023. This suggests an improvement in the efficiency of collecting receivables over time. However, after this peak, the ratio declined to around 8.2 times in late 2024, followed by a recovery back above 10 times toward early 2025. The general trend indicates a stronger management of receivables and enhanced cash collection efficiency over the reported period.

In summary, the revenue trend shows significant volatility with peaks in mid-2022 and early 2025, mirroring the general economic environment and possibly commodity price fluctuations. Receivables data and turnover ratios indicate fluctuations consistent with changes in sales volumes but overall improved collection efficiency, especially notable in the increasing turnover ratio until mid-2023. The recent period suggests some normalization or adjustment after earlier peaks.

Sales and Other Operating Revenues

The sales and other operating revenues exhibited a generally increasing trend from early 2021 through mid-2022, rising from $9,826 million in March 2021 to a peak of $21,161 million in June 2022. Following this peak, revenues declined during the remainder of 2022 and early 2023, dropping to $12,351 million in June 2023. From mid-2023 onward, revenues showed some recovery and fluctuation, generally stabilizing in the range of approximately $13,000 million to $16,500 million by the early part of 2025, indicating some volatility but no consistent long-term upward or downward movement after mid-2022.

Accounts Payable

Accounts payable increased steadily from $3,801 million in March 2021 to a high of $7,349 million in June 2025. This increase is relatively continuous, with minor fluctuations, evidencing growing obligations to suppliers and creditors over the observed period. This upward trend suggests increased purchasing activity or delayed payments over time. After reaching the peak in mid-2025, accounts payable slightly decreased but remained elevated relative to the initial periods.

Payables Turnover Ratio

The payables turnover ratio started at 5.91 in March 2021 and rose sharply to a peak of 14.81 in March 2023, reflecting a faster payment cycle or improved efficiency in settling accounts payable. Post this peak, the ratio declined gradually to 7.81 by June 2025. This decrease might indicate a lengthening of payment periods or a change in payment policies. The pattern suggests an initial improvement in payment management until early 2023, followed by a relaxation or slowdown in payment pace over the subsequent periods.

Overall Insights

The initial period is characterized by robust revenue growth and improving payables turnover, signifying operational expansion coupled with efficient payables management. However, after reaching peak revenues and optimal turnover rates in mid-2022 to early 2023, sales experienced notable declines and subsequent volatility, which could reflect market or operational challenges. Concurrently, accounts payable steadily grew, and the turnover ratio diminished, suggesting a possible shift toward longer payment terms or cash management strategies in response to changing business conditions. The interplay of these factors points to a dynamic financial environment with phases of growth and adjustment in working capital policies.

Working Capital

Working capital exhibits fluctuations over the observed periods, initially rising from $7,430 million in March 2021 to a peak of $9,732 million in September 2021, followed by a sharp decline to $4,029 million by December 2021. Subsequently, it generally trends downward with minor oscillations, reaching a low point near $2,953 million in June 2025 before slightly rebounding to approximately $3,875 million by September 2025. This pattern suggests periods of tightening liquidity followed by modest recovery phases.

Sales and Other Operating Revenues

Sales and other operating revenues demonstrate a rising trend from March 2021 through mid-2022, growing from roughly $9.8 billion to over $21 billion by June 2022, followed by a relative stabilization and some volatility in the subsequent periods. Revenues decrease during the latter half of 2022, bottom out around $12.3 billion mid-2023, then show recovery and moderate fluctuations through 2024 and into 2025, evidencing sensitivity to market or operational factors but generally maintaining a substantial revenue base above $13 billion in most recent quarters.

Working Capital Turnover

The working capital turnover ratio presents a significantly upward trajectory over the analyzed timeframe. Starting at 3.02 in March 2021, the ratio sharply increases to double-digit levels by December 2021, peaking near 19.57 by mid-2025. This increase indicates improved efficiency in utilizing working capital to generate revenues despite the declining working capital base. The ratio's pattern of reaching peaks and minor troughs aligns with the fluctuations in sales and working capital, reflecting adaptive operational management to sustain revenue generation capacity.

Overall Insights

The data reveals a company experiencing dynamic changes in liquidity and operational efficiency over time. The decline in working capital alongside resilient and moderately volatile revenues points to tighter asset management. The markedly rising working capital turnover ratio reflects an enhanced ability to generate higher sales volumes per unit of working capital held, which may suggest more effective inventory and receivables management or shifts in the composition of current assets and liabilities. However, the volatility in both working capital and sales implies exposure to external market conditions or internal strategy adjustments that should be monitored for continued financial stability.

Inventory Turnover Ratio

The inventory turnover ratio exhibited a general upward trend from the first quarter of 2021 through the end of 2022, increasing from 20.45 to a peak of 64.39. This suggests a significant acceleration in the rate at which inventory was sold and replenished during this period. However, starting in early 2023, the ratio began a gradual decline, dropping to 34.74 by the third quarter of 2025. Despite this decline, the turnover ratio remained higher than the levels observed in early 2021, indicating overall improved inventory efficiency compared to the start of the period.

Average Inventory Processing Period (Number of Days)

The average inventory processing period, measured in days, showed an inverse pattern relative to the turnover ratio. It decreased consistently from 18 days at the beginning of 2021 to a low of 6 days in late 2021 and early 2022, reflecting faster inventory movement. From that low point, the processing period gradually extended, increasing to 11-12 days by mid to late 2025. This increase indicates that inventory was held for longer periods compared to the peak efficiency period, though still shorter than at the beginning of the observation timeframe.

Overall Analysis

The trends in these two metrics are consistent with each other, as a higher inventory turnover ratio corresponds with a shorter inventory processing period. The data indicates that the company improved its inventory management efficiency steadily through 2022, reaching optimal turnover and minimal holding times. After this peak, there was a retracement toward longer holding periods and lower turnover, though not to the prior inefficient levels. This pattern might suggest changes in operational strategy, market conditions, supply chain dynamics, or demand variability impacting inventory management in the later periods.

Receivables Turnover Ratio

The receivables turnover ratio demonstrates a generally increasing trend from the first quarter of 2021 through to the first quarter of 2023, rising from 5.01 to a peak of 14.73. This implies an improvement in the efficiency of receivables collection over this period. Following this peak, the ratio declines somewhat in late 2023 to early 2024, stabilizing around values slightly above 10. From mid-2024 through 2025, the ratio shows modest fluctuations, ranging between approximately 8.18 and 11.47, indicating some variability but overall maintenance of improved collection efficiency compared to early 2021.

Average Receivable Collection Period

The average receivable collection period moves inversely to the receivables turnover ratio, decreasing from 73 days in the first quarter of 2021 to a low of 25 days by mid-2023. This trend signals a significant acceleration in the speed of receivable collections, enhancing cash flow. After reaching the low point, the average collection period increases somewhat, fluctuating around the low 30s days towards the end of 2023 and early 2024. In 2025, the collection period again varies somewhat, with a temporary rise back into the mid-40s days before trending downward to around 35 days by the latest quarter, indicating intermittent delays but generally better performance relative to the initial periods.

Summary of Trends and Insights

The data indicates that overall, the company has improved its receivables management from 2021 through early 2023, achieving faster collection times and higher turnover ratios. The subsequent period shows some regression and variability but not to levels seen initially. These changes could reflect shifting market conditions, credit policies, or customer payment behaviors. Regular fluctuations in both measures toward the most recent quarters suggest ongoing challenges in consistently maintaining peak efficiency, but the overall position remains improved relative to the base year.

Average Inventory Processing Period

The average inventory processing period shows a clear declining trend from 18 days in the first quarter of 2021 to a low of 6 days by the end of 2022. This suggests an improvement in inventory turnover efficiency over this period. However, starting from early 2023, there is a gradual increase, reaching 12 days by mid-2025, indicating a slowdown in inventory processing or potential buildup in stock levels towards the later periods.

Average Receivable Collection Period

The average receivable collection period exhibits a significant reduction from 73 days in the first quarter of 2021 to 25 days by mid-2023, demonstrating better credit and collections management or possibly improved customer payment behaviors. Following this low point, there is some variability and a slight upward trend, with values oscillating between the mid-30s and mid-40s from late 2023 to mid-2025. Despite this increase, the overall level remains below the early 2021 figures.

Operating Cycle

The operating cycle mirrors the patterns observed in the inventory and receivables periods. It declines markedly from 91 days at the start of 2021 to a minimum of 32 days by mid-2023, indicating enhanced operational efficiency and liquidity management. From this point, the operating cycle lengthens gradually, peaking at 57 days in mid-2025 before slightly improving again towards the end. This increase in the operating cycle may reflect the cumulative effect of longer inventory holding and receivable collection periods during this later timeframe.

Payables Turnover

The payables turnover ratio exhibited a consistent upward trend from early 2021 through early 2023, increasing from 5.91 to a peak of 14.81 by March 31, 2023. This indicates an acceleration in the frequency with which the company settled its payables, suggesting improved efficiency or more favorable payment terms during this period. However, after this peak, the ratio declined steadily to 9.06 by December 31, 2024, before showing a modest recovery to 9.57 by September 30, 2025. This decline may point to a lengthening of payment cycles or changes in supplier relationships that reduced the turnover speed.

Average Payables Payment Period

The average payables payment period, measured in number of days, mirrored the inverse trend of the turnover ratio. It reduced significantly from 62 days at March 31, 2021, to a low of 25 days during the first half of 2023. This shortening of payment periods substantiates the interpretation that the company was paying its suppliers faster over these quarters. Post mid-2023, the days payable began to increase, reaching 40 days by December 31, 2024, before fluctuating and settling at 38 days by the third quarter of 2025. This increase indicates a moderation or extension in the period the company takes to pay its suppliers relative to the earlier trend.

Summary of Trends

Overall, the data reflects a phase of improving payables management efficiency through faster payments and higher turnover until early 2023, followed by a reversal towards more conservative payment pacing through 2024 and 2025. The initial improvement could be attributable to strategic initiatives to enhance supplier terms or cash flow management, whereas the subsequent deceleration might be influenced by external factors such as market conditions, cash flow policies, or renegotiated supplier agreements.

Average Inventory Processing Period

The average inventory processing period shows a generally declining trend from March 2021 to December 2022, decreasing from 18 days to 6 days. After this period of decline, it stabilizes between 6 and 10 days from 2023 to 2025 with minor fluctuations, indicating a more consistent but slightly increased duration towards the end of the period analyzed.

Average Receivable Collection Period

The average receivable collection period demonstrates a marked improvement from March 2021 to March 2023, dropping significantly from 73 days to 26 days. Following this improvement, it fluctuates between 25 and 36 days through 2025, reflecting some volatility but maintaining shorter collection periods compared to the earlier years.

Average Payables Payment Period

The average payables payment period shows a steady decrease from 62 days in March 2021 to 25 days by March 2023, suggesting faster payments to suppliers over this timeframe. From mid-2023 onwards, the period increases again to around 40-47 days before slightly declining towards the end of 2025, indicating a shift towards less aggressive payment terms in the later years.

Cash Conversion Cycle

The cash conversion cycle exhibits a downward trend from 29 days in March 2021 to 7 days in March 2023, which reflects an improvement in the company’s cash flow efficiency. Afterward, it fluctuates between 6 and 17 days, with occasional increases particularly around mid-2024. Overall, the cycle remains relatively low compared to the start of the period, pointing to better management of working capital.