Exxon Mobil Corp. (NYSE:XOM)

The financial data presents several operational efficiency and working capital management metrics over a five-year period. Notable trends emerge when examining turnover ratios and days values for inventory, receivables, and payables, as well as derived cycles.

Inventory Turnover

The inventory turnover ratio increased significantly from 9.47 in 2020 to a peak of 16.32 in 2022, indicating a faster rate of inventory sales or usage. However, it declined somewhat in the next two years, settling at 14.42 in 2024. This suggests an enhancement in inventory management efficiency around 2021-2022, followed by a moderate stabilization.

Receivables Turnover

The receivables turnover ratio showed a moderate fluctuation, decreasing from 10.93 in 2020 to 10.29 in 2021, then rising to 12.14 in 2022, before gradually declining in subsequent years to 9.62 by 2024. This pattern indicates variability in collection efficiency, with a peak in 2022 but less efficient collection performance by 2024.

Payables Turnover

The payables turnover ratio rose from 10.20 in 2020 to 12.02 in 2022, suggesting quicker payment to suppliers during that period. It then decreased to 9.39 by 2024. This may reflect a strategic lengthening of payment terms or operational adjustments impacting cash outflows.

Working Capital Turnover

The working capital turnover ratio exhibits significant volatility. Data is absent for 2020, but it spikes at 110.19 in 2021, then sharply drops to 13.95 in 2022 and modestly fluctuates to 15.65 by 2024. The extremely high figure in 2021 likely represents an anomaly or exceptional event affecting working capital efficiency.

Average Inventory Processing Period

The average days inventory is held decreased markedly from 39 days in 2020 to 22 days in 2022, aligning with increased inventory turnover. It then rose slightly to 27 days in 2023 and decreased again to 25 days in 2024, reflecting generally improved inventory management over time.

Average Receivable Collection Period

The days sales outstanding fluctuated moderately, increasing from 33 days in 2020 to 38 days in 2024 with some interim decreases. This suggests some lengthening in the time taken to collect receivables, which could affect liquidity.

Operating Cycle

The operating cycle, representing the total time to convert inventory and receivables to cash, shortened from 72 days in 2020 to 52 days in 2022, then expanded to 63 days by 2024. This mirrors the changes in inventory and receivables periods, indicating improved operating efficiency mid-period followed by some delay.

Average Payables Payment Period

The days payable outstanding decreased from 36 days in 2020 to 30 days in 2022 but then lengthened to 39 days by 2024. This suggests a shift towards slower payments to suppliers in recent years, potentially to conserve cash.

Cash Conversion Cycle

The cash conversion cycle decreased from 36 days in 2020 to a low of 22 days in 2022, reflecting improved overall cash flow efficiency. It then experienced minor increases, ending at 24 days in 2024. This indicates relatively efficient cash management with some recent moderation.

The annual financial data reveals several notable trends over the five-year period from 2020 to 2024. The sales and other operating revenue experienced significant growth from 2020 through 2022, increasing sharply from approximately 178.6 billion US dollars in 2020 to nearly 398.7 billion US dollars in 2022. However, this upward trend reversed in 2023, with revenue declining to about 334.7 billion US dollars, followed by a slight recovery to 339.2 billion US dollars in 2024. This pattern indicates a peak in 2022, suggesting strong revenue growth initially, which then moderated with some volatility in subsequent years.

Inventories remained relatively stable in 2020 and 2021, around 18.8 billion US dollars, before rising significantly to approximately 24.4 billion US dollars in 2022. Inventories continued to increase slightly in 2023 to 25.1 billion US dollars but decreased to 23.5 billion US dollars in 2024. This fluctuation in inventory levels suggests active inventory management in response to changing market conditions or operational requirements.

The inventory turnover ratio, which measures how efficiently inventory is managed relative to sales, showed an overall increasing trend, starting at 9.47 in 2020 and peaking at 16.32 in 2022. This indicates increasingly efficient inventory use up to 2022, aligning with the significant sales growth observed. However, the ratio declined to 13.32 in 2023 and then rose again slightly to 14.42 in 2024. These changes suggest that while efficiency decreased somewhat after 2022, it remained higher than in 2020 and 2021, reflecting an ongoing effort to maintain relatively effective inventory utilization despite fluctuations in revenue and inventory levels.

Sales and other operating revenue

Strong growth through 2022, followed by a decline in 2023 and slight recovery in 2024.

Inventories

Stable initially, with a notable increase in 2022 and 2023, then a reduction in 2024.

Inventory turnover

Improved markedly through 2022, decreased in 2023, then slightly improved in 2024, indicating fluctuating but generally efficient inventory management.

Sales and Other Operating Revenue

The sales and other operating revenue demonstrated significant growth from 2020 to 2022, rising from approximately 178.6 billion US dollars in 2020 to nearly 398.7 billion US dollars in 2022. This represents a substantial increase over the two-year period. However, in 2023, the revenue decreased to about 334.7 billion US dollars, indicating a notable decline from the previous year. In 2024, a slight recovery occurred with revenue increasing modestly to approximately 339.2 billion US dollars, yet it remained below the 2022 peak.

Notes and Accounts Receivable, Trade (Less Reserves)

The balance of notes and accounts receivable, trade, excluding reserves, showed an upward trend overall during the period. Starting at around 16.3 billion US dollars at the end of 2020, this figure increased steadily each year, reaching approximately 35.3 billion US dollars by the end of 2024. This persistent growth reflects a possible increase in credit sales or extended payment terms but may also indicate higher outstanding receivables that could impact liquidity if not managed efficiently.

Receivables Turnover Ratio

The receivables turnover ratio fluctuated during the reported years, starting at 10.93 in 2020 and slightly declining to 10.29 in 2021. It then improved substantially to 12.14 in 2022, suggesting more efficient collection of receivables during that year. However, the ratio decreased again to 11.05 in 2023 and further dropped to 9.62 in 2024, indicating a reduced efficiency in collecting receivables relative to sales. This downward trend in the most recent years could imply longer collection periods or potential issues in credit management.

Sales and Other Operating Revenue

The sales and other operating revenue exhibited a significant upward trend from 2020 through 2022, increasing from 178,574 million US dollars in 2020 to 398,675 million US dollars by 2022. This represents more than a doubling in revenue over the two-year period. However, in 2023, there was a noticeable decline to 334,697 million US dollars, followed by a slight rebound in 2024 to 339,247 million US dollars. Overall, the trend indicates robust growth followed by a moderate correction and stabilization in the most recent years.

Trade Payables

Trade payables showed an increasing trajectory over the five-year period. Starting at 17,499 million US dollars in 2020, they rose steadily to reach 33,169 million US dollars by 2022. In 2023, there was a slight decrease to 31,249 million US dollars, but trade payables increased again in 2024 to 36,145 million US dollars, the highest level observed. This suggests an increasing reliance or extended credit terms from suppliers in recent years, consistent with expansion or increased operational activity.

Payables Turnover Ratio

The payables turnover ratio rose from 10.2 in 2020 to a peak of 12.02 in 2022, indicating that the company was paying its suppliers more frequently or faster during this period. This shift corresponds with the increase in sales and trade payables, suggesting efficient management of payables despite growth. However, from 2023 onwards, the ratio declined to 10.71 and further to 9.39 in 2024. This downward movement points to a lengthening of the payment cycle or slower payments to suppliers in the most recent years, which may be linked to the sales dip and possible changes in working capital management.

Working Capital

The working capital shows a significant improvement over the period analyzed. In 2020, it was negative at -11,470 million USD, indicating more current liabilities than current assets. From 2021 onwards, working capital turned positive and increased substantially, reaching a peak of 31,293 million USD in 2023. However, in 2024, there is a decline to 21,683 million USD, suggesting a reduction in available short-term liquidity compared to the previous year, though it remains positive and significantly above the 2021 levels.

Sales and Other Operating Revenue

Sales and other operating revenue experienced a strong upward trend from 2020 through 2022, climbing from 178,574 million USD to 398,675 million USD, more than doubling in two years. This peak was followed by a decline in 2023 to 334,697 million USD, and a slight recovery in 2024 to 339,247 million USD. Despite the decrease after 2022, the 2024 revenue remains well above the 2020 level, indicating overall growth in the company's operating revenues during the period.

Working Capital Turnover Ratio

The working capital turnover ratio, which measures the efficiency of using working capital to generate revenue, presents an unusual pattern. It was not available in 2020 but sharply decreased from 110.19 in 2021 to 13.95 in 2022, then further declined to 10.7 in 2023, before slightly increasing to 15.65 in 2024. This downward trend suggests that despite increasing sales and working capital, the efficiency in utilizing working capital to produce revenue has diminished over these years. The dip from a very high level in 2021 to substantially lower, more consistent ratios afterward may indicate a normalization or change in working capital management or business dynamics.

Inventory Turnover

The inventory turnover ratio demonstrates an overall increasing trend from 2020 through 2024, with a notable rise from 9.47 in 2020 to a peak of 16.32 in 2022. Although the ratio declined in 2023 to 13.32, it experienced a partial recovery in 2024, reaching 14.42. This pattern suggests an improvement in the efficiency of managing and selling inventory over this period, despite some fluctuation in the latter years.

Average Inventory Processing Period

The average inventory processing period aligns inversely with the inventory turnover, reflecting a general decrease from 39 days in 2020 to 22 days in 2022. This reduction indicates a faster inventory cycle and reduced holding times. A slight increase to 27 days in 2023 corresponds with the drop in turnover ratio observed that year, followed by a decrease back to 25 days in 2024. Overall, the data suggest enhanced inventory management efficiency, with some variability during the mid-term timeframe.

Receivables Turnover Ratio

The receivables turnover ratio experienced fluctuations over the observed period. Starting at 10.93 in 2020, it declined slightly to 10.29 in 2021, then increased to a peak of 12.14 in 2022. However, this improvement was followed by a decrease to 11.05 in 2023 and a further decline to 9.62 in 2024. This pattern indicates variability in how efficiently receivables are being collected, with a notable peak in 2022 followed by a gradual decrease thereafter.

Average Receivable Collection Period

The average collection period, measured in days, generally inversely reflects the trends observed in the receivables turnover ratio. The period initially increased from 33 days in 2020 to 35 days in 2021, suggesting a slight slowdown in collections. It then shortened significantly to 30 days in 2022, consistent with the peak in the turnover ratio the same year, indicating improved collection efficiency. However, this improvement was not sustained as the period increased again to 33 days in 2023 and further to 38 days in 2024, signaling a lengthening in the time required to collect receivables and reduced efficiency.

Overall Analysis

The data reveals a cyclical trend in receivables management. The company saw improved collection efficiency in 2022, as evidenced by a higher turnover ratio and a shorter collection period. However, the subsequent years suggest a decline in this efficiency, with turnover ratios falling and collection periods extending. These shifts may indicate challenges in maintaining consistent receivables management performance in the later periods.

The financial data reveals notable fluctuations in key operational efficiency indicators over the five-year span ending in 2024. An examination of inventory and receivable management metrics provides insights into the company's operational cycle dynamics.

Average Inventory Processing Period

This metric exhibits a decline from 39 days in 2020 to 22 days by 2022, indicating an improvement in inventory turnover speed during this period. However, a slight increase to 27 days occurs in 2023, followed by a return to 25 days in 2024, suggesting some variability but an overall trend towards efficient inventory processing relative to the starting year.

Average Receivable Collection Period

The receivable collection period starts at 33 days in 2020, rises moderately to 35 days in 2021, then decreases to 30 days in 2022, signaling improved receivables management. Notably, it then increases again to 33 days in 2023 and further to 38 days in 2024, indicating a lengthening in the time taken to collect receivables, which may reflect changes in credit policy or customer payment behaviors.

Operating Cycle

The combined operating cycle, influenced by both inventory and receivables periods, decreases substantially from 72 days in 2020 to 52 days in 2022, reflecting enhanced operational efficiency. Nevertheless, there is an upward shift to 60 days in 2023 and 63 days in 2024, suggesting a slight deterioration compared to 2022 though still improved relative to 2020 levels.

Overall, the data suggest that while inventory turnover improved markedly over the initial period, resulting in a shortening of the operating cycle, the subsequent increase in receivable collection days contributed to a longer operating cycle in the later years. The trends indicate a focus on faster inventory movement but a potential challenge in accelerating cash collection from customers in the most recent years. This mixed development could have implications for working capital management and liquidity.

Payables Turnover

The payables turnover ratio experienced fluctuations over the observed five-year period. It increased from 10.2 in 2020 to a peak of 12.02 in 2022, indicating an accelerated rate of paying off suppliers during this time. However, subsequent years showed a decline in turnover, with the ratio falling to 10.71 in 2023 and further to 9.39 in 2024. This downward trend suggests a slowing in payment frequency or a possible extension of credit terms by suppliers in the later years.

Average Payables Payment Period

The average payables payment period, expressed in days, displayed an inverse pattern relative to the payables turnover ratio. Starting at 36 days in 2020, it shortened steadily to 30 days by 2022, indicating quicker payments to suppliers. In the following years, the payment period lengthened again, rising to 34 days in 2023 and reaching 39 days in 2024. This increase implies that the company took more time to settle its payables, aligning with the reduction in payables turnover during the same timeframe.

Overall Insights

The data reveals a trend where the company initially improved its efficiency in managing payables by paying suppliers more quickly, reflected by a higher payables turnover and shorter payment period up to 2022. Nevertheless, a reversal occurred afterwards, with payments becoming slower and turnover ratios decreasing through 2023 and 2024. This shift could be indicative of strategic changes in cash management, supplier negotiations, or external financial pressures affecting payment behavior.

Average Inventory Processing Period

The average inventory processing period has shown a general decline from 39 days in 2020 to 25 days in 2024, indicating improved efficiency in inventory turnover. There was a notable decrease from 39 days in 2020 to 22 days by 2022, followed by a slight increase to 27 days in 2023, before settling back to 25 days in 2024.

Average Receivable Collection Period

The average receivable collection period has fluctuated over the years, starting at 33 days in 2020, increasing to 35 days in 2021, dropping to 30 days in 2022, and then rising again to 38 days by 2024. The overall trend suggests variability in the collection efficiency, with a higher value in 2024 compared to 2020, which may reflect slower collections.

Average Payables Payment Period

The average payables payment period remained relatively stable around the mid-30s in days, with a decline from 36 days in 2020 to 30 days in 2022, followed by an increase to 39 days in 2024. This trend indicates a strategic extension of payment terms in recent years, potentially to optimize working capital.

Cash Conversion Cycle

The cash conversion cycle shows a marked improvement from 36 days in 2020 to 22 days in 2022, reflecting enhanced overall working capital management by reducing the time to convert resources into cash. Although it rose slightly to 26 days in 2023, it decreased again to 24 days in 2024, maintaining a generally efficient cash flow cycle compared to the earlier years.