Occidental Petroleum Corp. (NYSE:OXY)

Inventory Turnover

The inventory turnover ratio demonstrates a predominantly increasing trend from March 2021 through June 2022, rising from 9.38 to 21.57, indicating improved efficiency in inventory management during this period. Subsequently, the ratio declines gradually through March 2024, reaching a minimum around 9.64, before increasing again to 14.49 by June 2025. This suggests fluctuating efficiency in inventory processing over the analyzed periods.

Receivables Turnover

The receivables turnover ratio starts relatively high at 8.42 in March 2021, dips to a low of 5.31 in September 2022, then rises sharply to peak at 11.07 by December 2022. Following this peak, a downward trend is observed through December 2023, with minor recovery thereafter. This pattern indicates variability in the company’s ability to collect receivables efficiently, with notable improvement in late 2022 followed by some decline in subsequent periods.

Payables Turnover

The payables turnover ratio shows an overall rising trend from 5.96 in March 2021 to a high point of 9.78 in September 2022, reflecting a potentially faster rate of payable settlements. After September 2022, the ratio gradually decreases, stabilizing around the 7.0–7.3 range by June 2025. This suggests that after a period of rapid payable turnover, the company’s payment pace moderated over time.

Working Capital Turnover

The working capital turnover ratio exhibits substantial volatility with dramatic fluctuations. Initial values in March through December 2021 oscillate between 5.99 and 49.75. Notably, there is an extreme spike reaching 2087.46 in June 2024, followed by missing data and then a return to more moderate values around 296.27 and 65.74 in later periods. Such variability may reflect irregular operational activity or accounting adjustments impacting working capital efficiency.

Average Inventory Processing Period

The average inventory processing period generally decreases from 48 days in June 2020 to a low of 17–18 days in mid to late 2022, suggesting faster inventory turnover in that timeframe. Following this, it lengthens progressively, reaching approximately 38 days by September 2024, before slightly improving toward 25 days by June 2025. This pattern mirrors the inverse of inventory turnover ratio movements, reflecting inventory holding time fluctuations.

Average Receivable Collection Period

The average receivable collection period varies notably, increasing from 43 days in March 2021 to a peak of 69 days in September 2021 and mid-2022. A subsequent improvement occurs toward March 2023, bringing collection periods down to approximately 33–34 days. After this point, the collection period extends gradually, stabilizing near 47–53 days toward mid-2025, indicating some challenges in reducing receivable days consistently over the longer term.

Operating Cycle

The operating cycle fluctuates with values between 82 and 115 days early on, then improves markedly to a range of 56 to 64 days by late 2022 and early 2023. This improvement aligns with shorter inventory and receivable periods. However, later data reveals an increasing trend reaching up to 90 days by September 2024, suggesting lengthening operational processes before again showing slight improvement toward March 2025.

Average Payables Payment Period

The average payables payment period increases from 61 days in March 2021 to a peak near 76 days in June 2021, but then shows a steady decline to about 36–40 days in late 2022. It rises once more to near 50 days through 2023 and into 2025. This indicates alternating strategies or external factors influencing the timing of payable settlements, oscillating between extending and shortening payment periods.

Cash Conversion Cycle

The cash conversion cycle exhibits a volatile but generally moderate range, starting around 21 days in March 2021, increasing to nearly 39 days by June 2021, then decreasing to a low of 15 days in March 2023. Subsequently, it fluctuates between 20 and 32 days through mid-2025. This reflects intermittent changes in the efficiency of converting investments in inventory and receivables back into cash, with periods of optimization followed by some elongation.

The data reveals several distinct trends in the financial performance over the reported periods. Net sales exhibit fluctuations with an overall moderate upward trajectory from early 2020 to 2025. Specifically, there was a significant dip in net sales during the second quarter of 2020, likely attributable to external market disruptions. Subsequent periods show gradual recovery and periods of growth, peaking intermittently, notably in mid-2022. However, net sales also demonstrate some volatility with intermittent declines in certain quarters toward the later years, indicating potential challenges in sustaining growth momentum.

Inventories have increased overall, although the pattern is somewhat irregular. Starting at a lower base in early 2020, inventory levels rose steadily through 2021 and early 2022, reaching notable peaks in the first quarter of 2023 and mid-2024. Thereafter, the inventory figures show variability with some declines, suggesting possible efforts to manage stock levels more efficiently or changing demand conditions. The inventory levels appear to be responsive to sales fluctuations, as seen in periods when inventory growth decelerates or reverses during weaker sales quarters.

Inventory turnover ratios, which were not reported for most of 2020, become available from the first quarter of 2021 and display an initially high and improving trend, peaking sharply in mid-2022. After this peak, the turnover ratio generally declines, indicating a slower rate of inventory movement relative to sales. This trend suggests that while the company experienced periods of improved operational efficiency in managing inventories relative to sales, challenges emerged in maintaining that efficiency consistently in the latter part of the timeline. The decline in turnover might reflect increasing inventory levels not fully aligned with sales volumes or changes in market demand.

Net Sales

Exhibited a sharp decline in Q2 2020, followed by recovery and variable growth, peaking around mid-2022.

Subsequent periods show fluctuations with some declines, indicating instability in maintaining sales growth.

The overall trend suggests sensitivity to market conditions and possible cyclical effects.

Inventories

Showed a general upward trend from 2020 through early 2023 with notable peaks, indicating inventory build-up.

Later periods reflect more variable inventory levels, possibly due to adjustments in inventory management strategies.

The inventory levels appear partially aligned with sales patterns but exhibit less stability.

Inventory Turnover

Improved significantly from early 2021 into mid-2022, evidencing greater inventory efficiency.

Declined after peak levels, suggesting slower inventory movement relative to sales in the latter periods.

This decline points to potential overstocking or reduced demand impacting turnover performance.

In summary, the observations indicate periods of recovery and growth interrupted by volatility in both sales and inventory metrics. Operational efficiency in inventory management improved initially but faced headwinds in sustaining momentum. The data suggests a need for ongoing focus on aligning inventory levels with fluctuating sales to optimize turnover ratios and support stable financial performance.

Net Sales Trend

Net sales exhibited significant volatility over the analyzed periods. Initially, there was a sharp decline from 6,613 million USD in March 2020 to a low of 2,928 million USD in June 2020, likely reflecting external disruptions. Subsequently, net sales showed a steady recovery through 2021, peaking at 7,913 million USD in December 2021. This was followed by fluctuations with another upward surge reaching 10,676 million USD by June 2022. Afterward, net sales experienced a gradual decline through 2023 and early 2024, with values oscillating between approximately 5,975 and 7,225 million USD, before stabilizing around 6,414 million USD by June 2025.

Trade Receivables, Net of Reserves

Trade receivables followed an overall upward trajectory from the beginning of the period, increasing from 2,458 million USD in March 2020 to a peak of 6,350 million USD in June 2022. This growth generally parallels the increasing net sales but showed more pronounced volatility thereafter. Following the peak, trade receivables declined sharply to 3,046 million USD by March 2021, and later exhibited cyclical movements with moderate fluctuations between 3,100 and 3,900 million USD up to June 2025, indicating variability in collections or credit policies.

Receivables Turnover Ratio

The receivables turnover ratio, available from September 2020 onwards, displayed volatility throughout the periods. It started at 8.42 and declined steadily to 5.41 by December 2020, indicating a slower collection period. The ratio improved progressively during 2021, reaching around 6.39 by December 2020 and further rising to double digits (10.85-11.07) in the first half of 2023, suggesting more efficient receivables management. However, after mid-2023, the turnover ratio decreased again to a range between approximately 6.9 and 8.8, implying a moderate slowdown in receivables collection speed.

Overall Insights

The data indicates a recovery and growth phase in net sales post-mid-2020, with corresponding increases in trade receivables that occasionally outpaced sales growth. Fluctuations in the receivables turnover ratio highlight periods of varying credit management effectiveness. Peaks in turnover ratio coincide with relatively efficient collections, while downturns suggest easing credit terms or reduced collection efforts. The interplay between net sales, receivables, and turnover ratios points to operational adjustments in response to market conditions and internal credit policies over time.

The analysis of the quarterly financial data reveals several key trends in sales, accounts payable, and payables turnover over the periods presented.

Net Sales

The net sales figures show significant fluctuations with an overall upward trend from March 2020 through June 2022, peaking at $10,676 million in June 2022. Initially, sales dropped sharply from $6,613 million in March 2020 to $2,928 million in June 2020, likely reflecting economic disruptions in that period. Subsequently, net sales increased steadily, reaching $7,913 million by December 2021 and continuing to rise to the mid-9,000s and above in 2022. However, from the end of 2022 through the first half of 2023, there was a noticeable decline, falling to $6,702 million by June 2023. This was followed by some recovery and stabilization, with sales fluctuating in the range of approximately $6,400 million to $7,200 million through to June 2025. The data suggests that after a recovery from an initial dip, net sales displayed volatility but maintained a level somewhat below the mid-2022 peak.

Accounts Payable

Accounts payable exhibited a more mixed pattern. Starting at approximately $3,845 million in March 2020, the values decreased until September 2020 and then rose consistently through June 2022, reaching a peak of $5,197 million. Post this peak, accounts payable declined sharply by the third quarter of 2022 but stabilized thereafter, fluctuating between roughly $3,500 million and $4,300 million from late 2022 to mid-2025. This suggests that the company managed its payables more aggressively following mid-2022 before maintaining moderate levels in subsequent periods.

Payables Turnover Ratio

The payables turnover ratio is available starting from March 2020 and demonstrates considerable variation. It fell from 5.96 in March 2020 to around 4.83 in June 2020, indicating slower turnover initially. Afterward, the ratio generally rose through 2021, reaching a high of 6.66 in December 2020 before stabilizing in the range from 6.22 to 6.9 across 2021 and early 2022. A notable increase occurs in late 2022 and early 2023, with the ratio peaking at 10.11 in September 2022. This spike points to a significant acceleration in the rate at which payables were paid. However, following this peak, the payables turnover ratio gradually declined through 2023 and into mid-2025, settling back into the 6 to 7 range. The pattern suggests a phase of intensified payment activity around late 2022, followed by a return to a more normalized turnover pace.

The analysis of the quarterly financial data reveals several notable trends across the presented periods.

Working Capital

The working capital values demonstrate significant volatility throughout the analyzed quarters. Initially, there is a sharp decline from a positive 2,146 million USD in March 2020 to a negative 1,482 million USD in June 2020. Subsequently, the working capital recovers to positive territory and fluctuates with both increases and decreases, reaching a peak of 3,258 million USD in June 2021. Following this peak, working capital experiences another period of decline, even turning negative in several quarters starting from mid-2023 through early 2025. The most recent data points suggest slight recovery with moderate positive values recorded in March 2025 and June 2025.

Net Sales

Net sales display an overall upward trend with periodic fluctuations. Starting at 6,613 million USD in March 2020, sales drop significantly to 2,928 million USD in June 2020, likely reflecting market disruptions. After this decline, net sales generally increase quarter-over-quarter, peaking at 10,676 million USD in June 2022. Post mid-2022, net sales exhibit fluctuations without a clear upward or downward trend, settling around the 6,000 to 7,000 million USD range through mid-2025. This pattern suggests stabilization after a recovery phase with some volatility in recent quarters.

Working Capital Turnover Ratio

The working capital turnover ratio shows a highly inconsistent pattern with some extreme values, indicative of fluctuating efficiency in utilizing working capital to generate sales. Data is missing for several early quarters, but beginning in March 2021, the ratio shows a wide range, starting at 29.88 and dipping as low as 5.99 by September 2021. Afterwards, the ratio spikes dramatically, reaching a high of 50.58 in December 2022 and even higher anomalies such as 2087.46 in June 2024. These irregular values suggest either significant changes in working capital relative to sales or possible data anomalies in those periods. Overall, a stable trend in efficiency cannot be deduced from the turnover ratios due to the extreme volatility.

In summary, the data illustrates a business environment characterized by volatile working capital management, strong but fluctuating net sales growth following an initial decline, and wildly inconsistent working capital turnover ratios. The significant swings in working capital and its turnover ratio merit further examination to understand the underlying operational or financial factors driving these trends.

Inventory Turnover

The inventory turnover ratio demonstrates a marked increase beginning from the first available data point in March 2021. Initially recorded at 9.38, it declined to 7.59 in the following quarter but then increased steadily, reaching a peak of 21.57 in September 2022. Following this peak, the ratio showed a downward trend through the remainder of 2022 and 2023, decreasing from 18.75 to 13.97 by December 2023. In 2024, the ratio fluctuated moderately, varying between 12.67 and 14.49, indicating some variability but remaining relatively stable compared to prior years.

Average Inventory Processing Period

The average inventory processing period in days exhibited an inverse pattern relative to the inventory turnover ratio. Starting at 39 days in March 2021, it increased to 48 days in June 2021, before declining sharply to 17-18 days in mid-2022. Subsequently, the period lengthened slightly, fluctuating between 19 and 26 days towards the end of 2022 and throughout 2023. In 2024, the period showed an increase to a high of 38 days in September, followed by a reduction back to 25 days by June 2025. These changes suggest periods of faster inventory movement during late 2021 and 2022, with some slowing in the later dates observed.

Relationship and Insights

The data indicate a clear inverse relationship between inventory turnover and the average inventory processing period, consistent with financial theory. Periods of higher turnover align with shorter processing times, while lower turnover correlates with longer inventory days. The peak turnover in late 2022 appears to correspond to the shortest processing periods, signifying efficient inventory management during that time. The subsequent normalization in these metrics in 2023 and 2024 suggests adjustments to inventory strategies or market conditions affecting inventory flow and holding.

Receivables Turnover

The receivables turnover ratio exhibits notable fluctuations over the analyzed periods. Starting with a value of 8.42 in March 2021, it declined significantly to 5.41 by June 2021. Subsequently, it experienced a gradual recovery, reaching 6.39 in December 2021. During 2022, the ratio showed a decline in the first half-year, hitting a low of 5.31 in September, followed by a sharp increase to 8.98 by December. The first three quarters of 2023 marked further improvement, peaking at 11.07 in September 2023, which suggests enhanced efficiency in collecting receivables. However, this higher level was not sustained, as the ratio declined to 7.98 by December 2023, demonstrating some volatility. In 2024, the ratio continues to fluctuate moderately, ranging between approximately 6.9 to 8.8, indicating a stabilization phase yet with some variability. The latest figures in early 2025 show a slight upward trend, moving from 7.58 to 7.83.

Average Receivable Collection Period

The average receivable collection period, expressed in days, presents an inverse pattern to the receivables turnover ratio, as expected. Initial data in March 2021 reveal a relatively short collection period of 43 days, which then lengthened substantially to 67 days by June 2021. Over the next six months, the collection period gradually shortened to 57 days by year-end 2021. During 2022, the collection period initially increased, peaking at 69 days in the third quarter, but then saw a significant reduction to 41 days in December, coinciding with the increase in turnover ratio in the same period. The first three quarters of 2023 denote further improvements with the shortest collection periods observed—33 and 34 days—indicating improved cash collection processes. Late 2023 and throughout 2024 show a gradual lengthening of the collection period again, moving between 44 and 53 days, which corresponds with the moderate decrease and stabilization seen in the turnover ratio. Data from early 2025 demonstrates a slightly shorter collection period near 47-48 days, suggesting some improvement compared to the end of 2024.

Overall Analysis

The data reveals cycles in working capital efficiency as reflected in accounts receivable management. Periods of lower turnover ratios correspond with lengthening collection periods, signifying slower cash conversion from sales. Conversely, higher turnover ratios and shorter collection periods indicate more effective receivables management. The volatility, notably during 2021 and early 2022, may reflect external factors impacting credit policies or customer payment behaviors. The improvements in late 2022 and the first part of 2023 highlight a successful tightening of credit terms or collection efforts, leading to faster cash inflows. However, a partial reversal in late 2023 and 2024 suggests the company faces challenges maintaining optimal collection efficiency consistently. The recent stabilization and modest improvements in early 2025 imply potential positive adjustments in receivables management strategies. Continuous monitoring and strategic actions will be important to sustain and improve these efficiency metrics.

Average Inventory Processing Period

The average inventory processing period displays a decreasing trend starting from 39 days in March 2021 to a low of 17 days in September 2022. Following this trough, the period slightly increased to 29 days by June 2024 before trending back down to 25 days in June 2025. This pattern suggests an initial improvement in inventory turnover efficiency, followed by some fluctuations and a general stabilization in processing time in more recent quarters.

Average Receivable Collection Period

The average receivable collection period shows more variability, with notable fluctuations over the observed quarters. It peaked at 69 days in September 2022, after which it decreased significantly to 33 days by March 2023. Following that decrease, the period rose again, reaching around the mid-40 to low-50 day range through 2024 and early 2025. This volatility could indicate changes in credit policy or customer payment behavior affecting collection efficiency.

Operating Cycle

The operating cycle, which combines the inventory processing and receivable collection periods, follows a somewhat parallel trend to those components. It increased sharply from 82 days in March 2021 to a peak of 115 days in June 2021, then declined steadily to its lowest point of 56 days in December 2022. Subsequently, the cycle lengthened again, reaching 90 days by March 2024, before decreasing somewhat to 72 days in June 2025. This pattern reflects the combined effects of the changes in inventory and receivable management, with periods of both tightening and lengthening operational cash conversion times.

Payables Turnover Ratio

The payables turnover ratio, which measures how many times a company pays off its suppliers during a period, showed notable fluctuations over the observed quarters. Beginning with a ratio of 5.96 in March 2021, it declined to 4.83 in June 2021 but generally trended upward thereafter. By December 2021, the ratio reached 5.98, and it continued to increase significantly through 2022, peaking at 9.78 in December 2022. This peak indicates a substantially faster payment cycle during that quarter. Following this peak, the ratio experienced a decline in early 2023, dropping to 7.5 in March 2023, and then fluctuated moderately around the 7.0 mark through mid-2025, ending at 7.1 in June 2025. Overall, the trend suggests an initial improvement in payment efficiency reaching a high in late 2022, followed by a stabilization period with moderate reduction in turnover speed.

Average Payables Payment Period

The average payables payment period, reflecting the average number of days taken to pay suppliers, inversely correlates with the payables turnover ratio. Starting from 61 days in March 2021, the period lengthened to 76 days in June 2021, indicating slower payments at that time. Subsequently, this metric showed a decreasing trend, reaching a minimum of 37 days by December 2021, which aligns with the increase in the turnover ratio during that period. The shortest payment periods were observed in late 2022, with values as low as 36 and 40 days, coinciding with the peak turnover ratios. After this period of quicker payments, the average payment period increased again progressively, reaching 58 days by March 2024, then slightly declining but remaining higher than the late 2022 levels, ending near 50-51 days by mid-2025. This indicates a relaxation in payment speed following the rapid payment phase.

Insights

The data reveals that the company accelerated its payments notably in the latter half of 2021 through 2022, achieving rapid payables turnover and shorter payment periods. This could signify a strategic shift to improve supplier relationships or leverage early payment discounts. However, from 2023 onward, there is evidence of a gradual normalization or lengthening of payment terms, which might reflect changes in cash flow management strategies or responses to market conditions. Despite increased payment periods after 2022, turnover ratios remained relatively high compared to early 2021, suggesting the company maintains an overall efficient payables process.

Average Inventory Processing Period

The inventory processing period exhibited variability over the observed timeline. Initially unavailable, the data beginning in the first quarter of 2021 indicates a period of 39 days, peaking at 48 days in the second quarter of 2021. Subsequently, a general downward trend is evident, reaching a low of 17 days in the third quarter of 2022. Thereafter, the period moderately increases, fluctuating around the low to mid-twenties before rising to 38 days in the third quarter of 2024. The period then decreases again, ending at 25 days in the second quarter of 2025.

Average Receivable Collection Period

The receivable collection period shows a fluctuating pattern with notable peaks and troughs. Starting at 43 days in the first quarter of 2021, the period rises sharply to 67 days in the second quarter of 2021 and remains elevated through the third and fourth quarters of that year. A marked decline follows in early 2022, reaching a low of 33 days in the first quarter of 2023. Subsequent quarters reveal moderate fluctuations, with values mostly in the 40 to low 50-day range. Towards the end of the period, a slight uptick occurs, with the figure reaching 48 days in the second quarter of 2025.

Average Payables Payment Period

The payables payment period displays an initial increase, peaking at 76 days in the second quarter of 2021 after starting at 61 days in the first quarter of 2021. This peak is followed by a steady decline to 36 days in the third quarter of 2022. In later periods, the payment period fluctuates between the high 30s and high 50s range, ending at 51 days in the second quarter of 2025. Notably, the period remains relatively stable after the mid-2022 trough.

Cash Conversion Cycle

The cash conversion cycle generally hovers around a 20 to 30-day range, with some variability. It starts at 21 days in the first quarter of 2021 and increases to a peak of 39 days in the second quarter of 2021. A subsequent decline to 15 days is observed in the first quarter of 2023, which represents the lowest point in the dataset. Throughout the following quarters, the cycle fluctuates mildly, with an increase to 32 days in the third quarter of 2024 before declining to 21 days in the second quarter of 2025. Overall, the cash conversion cycle suggests moderate efficiency in working capital management with periodic improvements and setbacks.