EQT Corp. (NYSE:EQT)

The analysis of the financial turnover and period metrics over the examined quarters reveals several notable patterns and trends. The receivables turnover ratio showed a general rising trend from early 2018 through 2019, peaking around 8.3 in the third quarter of 2020, which indicates an improvement in the efficiency of collecting receivables. However, subsequent quarters exhibited some volatility with a decline and then a moderate recovery by late 2022. This fluctuation suggests variations in the company's collection effectiveness over time.

The payables turnover ratio experienced a more nuanced trajectory. Starting with an increase from the first data point in early 2018 through late 2019, it then decreased markedly through 2020 and most of 2021, reaching its lowest levels. A noticeable rebound appears from early 2022 onward, culminating in a strong increase to 7.36 by the last quarter observed. This pattern suggests that the company initially accelerated payment to suppliers, slowed down during the middle period, and then expedited payments again by 2022.

The working capital turnover ratio data is less complete but indicates extraordinarily high values during late 2018 to early 2019, reaching above 90 at one point, before significantly dropping by the first quarter of 2020 and not being reported afterward. This sharp fluctuation may reflect unusual operational or reporting conditions impacting the relationship between working capital and sales activity during that period.

Regarding the average receivable collection period, the number of days declined from 97 days in early 2018 to a low of 44 days in the third quarter of 2020, signifying improved collection speed. However, the period increased again after that peak efficiency point, fluctuating between the mid-50s to mid-80s days into late 2021 before decreasing once more toward the end of the data series. This suggests varying challenges in accounts receivable management, with periods of both increased and decreased liquidity.

The average payables payment period also demonstrated variability, initially decreasing from 82 days in early 2018 to a low of 63 days in late 2018, then climbing steadily to a peak of 97 days throughout 2020 and early 2021. This implies a strategic extension of the payment period during that time. From mid-2021 onward, the payment period decreased steadily, reaching 50 days by the last quarter measured, suggesting a policy shift toward faster supplier payments.

Overall, the data indicates that the company has experienced significant fluctuations in its operational efficiency and cash conversion cycle. Improvements and deteriorations in receivables and payables turnover and collection/payment periods highlight periods of changing liquidity management strategies. The pronounced swings in working capital turnover during the earlier part of the timeline warrant further investigation to understand underlying causes. The recent trends toward higher payables turnover and reduced payment periods coupled with stabilized receivables turnover may indicate a more balanced or conservative cash management approach in recent quarters.

Sales of natural gas, natural gas liquids and oil

The sales figures display considerable fluctuation over the observed periods from early 2018 through late 2022. Starting at approximately $1.23 billion in Q1 2018, sales decreased in the following quarters of the same year, bottoming near $770 million by Q3 2019. A general upward trend is apparent beginning in Q4 2020, with a marked acceleration through 2021 and 2022. The peak is observed in Q4 2022 at around $3.69 billion, indicating strong growth likely driven by market conditions or operational factors.

Accounts receivable, less provision for doubtful accounts

Accounts receivable exhibit a somewhat cyclical pattern with notable variability aligned loosely with the sales trends but with some lag and deviation. Starting at about $674 million in Q1 2018, receivables rose to a peak of roughly $1.24 billion by Q4 2018, then declined by mid-2019 to nearly $552 million by Q3 2019. A second major increase is seen beginning late 2020, peaking around $1.44 billion in Q4 2021. Another surge is evident in 2022, with levels reaching near $2.06 billion in Q3 before a slight reduction. This pattern suggests periodic adjustments potentially related to credit policies or collection efficiencies.

Receivables turnover ratio

The receivables turnover ratio, available from Q4 2018 onwards, indicates variability in collection efficiency. The ratio peaked at 8.3 in Q3 2020, reflecting faster conversion of receivables into cash, and saw troughs around 4.27 in Q4 2021, suggesting slower collections during that quarter. Fluctuations in turnover ratio generally correspond inversely with increases in accounts receivable balances, implying some periods of slower receivables collection against sales. The ratio improves again in late 2022, possibly reflecting enhanced collection efforts or changes in sales mix.

The financial data reveals several notable trends in the company's operations and working capital management over the analyzed periods.

Sales of Natural Gas, Natural Gas Liquids, and Oil

The sales figures exhibit significant fluctuations with an overall increasing trajectory toward the later periods. Initially, from March 2018 through December 2018, sales show variability but remain within a relatively narrow range, peaking in December 2018 at approximately $1.43 billion. A decline is observed in 2019, with figures generally trending downward and reaching a low in June 2020 near $499 million amid a challenging market environment. Subsequently, a strong recovery and growth phase emerges starting in late 2020. This growth peaks in December 2021 with sales surpassing $2.8 billion, followed by sustained high sales values into 2022, reaching over $3.6 billion by September 2022. This pattern suggests increased market demand or pricing strength for the company's products in the latter periods, reflecting improved operational performance or favorable external conditions.

Accounts Payable

The accounts payable balances demonstrate a general upward trend over the entire timeline. Starting at approximately $700 million in March 2018, payables increase steadily with some periodic fluctuations. Notably, payables rise significantly after mid-2020, moving from around $705 million in December 2020 to nearly $1.7 billion by mid-2022. This increase aligns temporally with the surge in sales, indicating higher procurement or operational expenditures likely corresponding with expanded business activity. However, the relative growth in payables is less steep than sales growth, suggesting possible improvements or changes in payment terms or supplier negotiations.

Payables Turnover Ratio

The payables turnover ratio, which measures the frequency with which accounts payable are paid off during a period, presents an insightful view of payment practices. The ratio exhibits fluctuations from 2018 onwards. Initial values in early 2019 indicate a turnover near 4.4, increasing gradually to around 5.8 by December 2019, suggesting faster payment cycles or reduced outstanding payables relative to purchases. However, from March 2020, the ratio declines, reaching its lowest levels between late 2020 and early 2021, with values near 3.7, signaling a slower payment pace or extended payables days during this period. Post-first quarter 2021, the ratio recovers, reaching a peak of approximately 7.36 by September 2022, reflecting accelerated payments or more efficient working capital management by the company.

The financial data exhibits significant fluctuations and trends across various quarters. Working capital demonstrates pronounced volatility, alternating between positive and negative values over the examined periods. Initially, working capital was positive at the end of March 2018, but it quickly turned negative in subsequent quarters through 2018 and part of 2019. A recovery phase is observed in mid-to-late 2019, with working capital returning to positive levels and peaking toward the end of that year. However, this trend reverses again during 2020 and intensifies with substantial negative values in 2021 and 2022, indicating increasing challenges in managing current assets and liabilities efficiently.

Sales of natural gas, natural gas liquids, and oil present an upward trajectory over the timeframe. Early 2018 data show sales fluctuating around US$1.2 billion but experience a decline moving into 2019 and early 2020, reaching a low in the June 2020 quarter, likely reflecting adverse market conditions or operational impacts. From this point onward, sales recover steadily and sharply, particularly noticeable from the end of 2020 onwards. The data showcases a remarkable increase in 2021 and 2022 quarters, culminating in sales exceeding US$3.6 billion by the third quarter of 2022. This positive trend suggests enhanced production capacity, favorable market prices, or both.

The working capital turnover ratio is sparsely populated, with meaningful data only available for several quarters in 2019. It starts at an exceptionally high level of 71.75, rising further to 96.08, then dropping noticeably to 9.27 and 6.81 in the subsequent quarters. These values indicate extreme efficiency or anomalies in short-term asset utilization during 2019, as turnovers above typical industry benchmarks are not sustainable over long periods. The absence of data before and after these points restricts complete longitudinal analysis of this metric.

In summary, the company’s working capital positions have been highly unstable, with extended periods of negative values indicating liquidity pressures or aggressive investment strategies. Conversely, the sales figures for natural gas, liquids, and oil display a strong recovery and growth pattern particularly after mid-2020, which may contribute positively to operational cash flows and eventually to the improvement of working capital, if the trend persists. The limited data on working capital turnover suggests exceptional efficiency during 2019 but lacks sufficient context for ongoing assessment. Overall, the patterns reflect a business experiencing volatility in liquidity measures while seeing robust revenue growth in its core product segments.

Working Capital

Highly volatile with swings between positive and large negative values; peaked late in 2019 but declined substantially through 2021 and 2022.

Sales of Natural Gas, Liquids, and Oil

Fluctuated in early periods, saw a trough mid-2020, then rose markedly through 2021 into 2022, reaching record highs.

Working Capital Turnover

Data only available for 2019; shows very high ratios initially which decrease later in the year; no data for other periods, limiting comprehensive analysis.

Receivables Turnover Trend

The receivables turnover ratio shows an overall fluctuating pattern from March 2019 through September 2022. Initially, there is an upward trend from 3.78 in March 2019 to a peak of 8.3 in September 2020, indicating an improvement in the efficiency of collecting receivables. However, following this peak, the ratio declines to 6.21 by December 2020 and further fluctuates between 4.27 and 6.73 in subsequent quarters. This variability suggests intermittent changes in the company's ability to convert receivables into cash.

Average Receivable Collection Period Trend

The average receivable collection period inversely mirrors the receivables turnover trend, beginning at 97 days in March 2019 and decreasing to a low of 44 days in September 2020, consistent with the increase in turnover. Post-September 2020, the collection period increases again, peaking at 86 days in December 2021, before moderating to 57 days by September 2022. The lengthening of the collection period during this period suggests a slowing in cash inflows from receivables.

Correlation Between Metrics

The inverse relationship between receivables turnover and the average collection period is evident throughout the periods analyzed. Periods with higher turnover ratios correspond to shorter collection periods and vice versa, reflecting typical financial behavior in accounts receivable management.

Overall Insight

The data indicates the company experienced enhanced receivables management efficiency up to late 2020, improving liquidity through faster collections. However, the subsequent period shows signs of reduced efficiency, with longer collection periods and lower turnover ratios, which could impact cash flow. Fluctuations may reflect changes in customer payment behaviors, credit policies, or market conditions affecting the company's receivables management.

Payables Turnover

The payables turnover ratio indicates a generally increasing trend over the observed periods, starting from 4.43 in March 2019 and rising to 7.36 by September 2022. The value exhibits some short-term fluctuations, with a dip observed in the periods from March 2020 to December 2020, where the ratio decreased to as low as 3.76. However, from March 2021 onwards, the ratio shows a strong upward momentum, reaching its peak in the last period assessed. This pattern suggests an improvement in the company's efficiency in managing payables, with faster payment cycles becoming more frequent in the latter periods.

Average Payables Payment Period

The average payables payment period, expressed in number of days, shows an inverse trend relative to the payables turnover. Initial values around 82 days in March 2019 decrease to a low of 63 days in December 2019, followed by an increase to a peak near 97 days in December 2020 and March 2021. After this peak, a consistent decline is observed, falling to 50 days by September 2022. The overall downward trend in recent periods denotes a shortening of the payment period to suppliers, implying an acceleration in payment practices and potentially stronger liquidity or changes in credit terms negotiated by the company.

Summary and Insights

The analyzed data reveals a clear relationship between the two metrics: as the payables turnover ratio improves, the average payment period decreases. The periods of higher average payment days align with lower turnover ratios, and vice versa. This suggests that the company has been enhancing its payables management efficiency, particularly evident from 2021 onwards. The trends may reflect strategic decisions to settle payables faster, possibly to take advantage of early payment discounts or to strengthen supplier relationships. Overall, the financial management of payables appears to have become more effective over time, contributing positively to the company's working capital management.