Occidental Petroleum Corp. (NYSE:OXY)

Inventory Turnover

The inventory turnover ratio demonstrates a generally increasing trend from early 2021 through mid-2022, peaking at 21.57 in September 2022. Following this peak, the ratio gradually declines, reaching 12.88 by March 2025. This pattern suggests an improvement in inventory management efficiency up to late 2022, with some reduction in turnover activity thereafter.

Receivables Turnover

Receivables turnover experienced a decline from March 2021 to mid-2022, hitting a low near 5.31 in September 2022, indicating slower collection of receivables. Subsequently, turnover increases notably to above 10 in late 2022 and early 2023, indicating improved collection efficiency. The ratio then recedes again, stabilizing around 7.5 by early 2025.

Payables Turnover

Payables turnover shows a fluctuating but generally increasing trend from 5.96 in March 2021 to a peak of 9.78 in September 2022. Post this peak, turnover declines to approximately 7.3 by March 2025. This indicates a period of relatively faster payables processing followed by a moderation in payment pace.

Working Capital Turnover

Working capital turnover exhibits high volatility. It starts strong at 29.88 in March 2021, declines to lows around 5.99 in September 2021, then surges dramatically to as high as 2087.46 in June 2024, before dropping again. These extreme variations suggest inconsistent utilization of working capital across periods, with some periods reflecting exceptionally high operational efficiency or one-time financial events.

Average Inventory Processing Period

The average inventory processing period decreases steadily from 39 days in March 2021 to a low near 17 days in mid-2022, reflecting faster inventory turnover. Afterward, it increases moderately to about 31-38 days by late 2024, indicating some slowing in inventory processing speed.

Average Receivable Collection Period

This period lengthened significantly from 43 days in March 2021 to a peak around 69 days in mid-2022, indicating slower customer payments. It then declines to about 33 days early in 2023, implying improved collections, before moderately increasing again to around 48 days by early 2025.

Operating Cycle

The operating cycle length fluctuated between 82 and 115 days early in the period, then shortened significantly to about 60 days in late 2022, showing improved operational efficiency. Later, it extends again to roughly 90 days before decreasing to the mid-70s range by early 2025.

Average Payables Payment Period

The average duration for payables payment initially increased from 61 days in March 2021 to a low of 36 days by late 2022, suggesting quicker payments. Subsequently, the period extends again to approximately 58 days before settling near 50 days in early 2025.

Cash Conversion Cycle

The cash conversion cycle experiences variability between 15 to 39 days, initially increasing to 39 days around mid-2021, then generally declining to a low of 15 days early in 2023. It later rises again slightly to low 30s before stabilizing around 26 days by early 2025. This indicates fluctuating efficiency in converting resource inputs into cash flow over time.

Net Sales

The net sales figures exhibit significant volatility, particularly in the early periods of 2020. Beginning at 6,613 million USD in March 2020, the sales sharply declined to 2,928 million USD by June 2020, reflecting a substantial contraction. Subsequently, net sales showed a recovery trend through 2021 and 2022, reaching a peak of 10,676 million USD in June 2022. After this peak, the values experienced fluctuations but generally remained above the levels seen before 2022, with sales hovering between approximately 6,700 and 7,200 million USD from 2023 onward. The overall pattern suggests recovery and stabilization after an initial downturn.

Inventories

Inventory levels presented a gradual increase from March 2020 through early 2023, starting at 1,436 million USD and peaking at 2,311 million USD in March 2023. This growth in inventory levels implies accumulation during this timeframe. After this peak, inventory values showed some degree of fluctuation, with values moving between roughly 2,000 and 2,800 million USD. Notably, inventory values decreased in late 2024, falling to 2,095 million USD by September 2024 before slightly increasing again. This variation may suggest adjustments to inventory management in response to changing sales patterns or market conditions.

Inventory Turnover Ratio

The inventory turnover ratio data commences in the last quarter of 2020, initiating at 9.38 and showing a strong upward trend through 2022. The ratio peaked at 21.57 in September 2022, indicating a significantly improved efficiency in managing inventory relative to sales during that period. Following this peak, the turnover ratio gradually declined, settling around 12.76 to 12.88 in the last quarters of 2024 and early 2025. This decline from peak levels may indicate a slowdown in inventory movement or an increase in inventory relative to sales volume.

Summary of Trends

The analysis highlights a strong correlation between sales performance and inventory dynamics. After an initial decline in net sales during the first half of 2020, a recovery phase is evident with corresponding increases in inventory levels. The rising inventory turnover ratio until late 2022 suggests enhanced operational efficiency in converting inventory into sales. However, subsequent declines in this ratio, alongside fluctuating inventory levels, indicate adjustments in inventory or sales cycles. The data suggests that after a period of recovery and growth, the company is managing inventory more conservatively in recent quarters while maintaining relatively stable net sales.

Net Sales

The net sales demonstrate significant volatility over the observed periods. A notably low point occurred in June 2020, with sales dropping to 2,928 million USD, followed by a steady increase through 2021 peaking at 7,913 million USD in December 2021. The first quarter of 2022 continued this upward trend, reaching 10,676 million USD in June 2022. Subsequently, sales fluctuated with a downward trend until March 2023, when they reached 7,225 million USD. Thereafter, net sales remained relatively stable with minor oscillations through 2024 and early 2025, mainly hovering between approximately 6,700 and 7,800 million USD. Overall, the data suggests recovery and growth after the low point in mid-2020, with a plateau phase following the peak in mid-2022.

Trade Receivables, Net of Reserves

Trade receivables exhibited a general increasing trend from March 2020 through June 2022, rising from 2,458 million USD to a peak of 6,350 million USD. This growth aligns with the increasing sales trend during the same period. After the peak, receivables dropped sharply in September 2022 to 4,046 million USD and fluctuated moderately between 3,195 and 4,281 million USD through late 2023. From early 2024 onwards, trade receivables showed a modest but consistent increase, stabilizing around the 3,500 to 3,900 million USD range. The variations suggest cyclical adjustments in credit management or collection periods in response to changing sales volumes and market conditions.

Receivables Turnover

The receivables turnover ratio appeared only from the third quarter of 2020 and varied notably throughout the periods. Initial values decreased from 8.42 in September 2020 down to a low of 5.31 in the third quarter of 2022, indicating a slower collections process or higher receivables relative to sales. Subsequently, turnover increased considerably to 11.07 in the fourth quarter of 2022 and remained elevated above 7.9 thereafter, though with periodic declines observed in 2024. By early 2025, the ratio stabilized near 7.6 to 7.7. These fluctuations may reflect adjustments in credit policy, improved collections efficiency following 2022, and responses to sales and receivables volatility.

The net sales demonstrate notable fluctuations over the observed quarters. Beginning at $6,613 million in the first quarter of 2020, sales experience a significant drop in the second quarter of 2020, reaching a low of $2,928 million, likely influenced by external economic factors during that period. Subsequently, there is a gradual recovery and a general upward trend through 2021 and 2022, peaking at $10,676 million in the second quarter of 2022. However, after this peak, net sales decline moderately and fluctuate between approximately $6,700 million and $7,200 million from late 2022 through early 2025, indicating a period of relative stabilization but at a lower level than the earlier peak.

Accounts payable also reflect considerable variation during the timeline. Starting at $3,845 million in the first quarter of 2020, accounts payable decrease towards the third quarter of 2020, hitting $2,682 million before gradually increasing again. A pronounced increase is seen in the first half of 2022, with accounts payable reaching $5,197 million in the second quarter of 2022, followed by a sharp drop in the third quarter of 2022 to $3,715 million. From that point onward, accounts payable maintain values mostly within the $3,500 million to $4,300 million range. This pattern suggests variability in payment obligations, potentially correlated with the fluctuations in sales volume and operational activity.

The payables turnover ratio data, although not available for the early quarters, begin from the fourth quarter of 2020 at 5.96 and show consistent variation thereafter. This ratio peaks significantly in the third quarter of 2022 at 10.11, reflecting a period when the company was turning over payables more rapidly, possibly due to increased efficiency or changes in supplier payment terms. Subsequently, the ratio decreases and stabilizes within a range of approximately 6.3 to 7.3 through the periods in 2023 and early 2025, indicating a more steady state of payables management during these later periods.

Net Sales Trends

Initial sharp decline in early 2020 followed by recovery and peak in mid-2022; moderate decline and stabilization through early 2025.

Accounts Payable Patterns

Decrease in mid-2020, increase to a peak in mid-2022, followed by reduction and stabilization; suggests variability in operational obligations.

Payables Turnover Ratio Dynamics

Initial rise to a high point in late 2022, then a decrease and stabilization in the range of 6 to 7; indicates changes in payables processing efficiency or supplier terms.

Working Capital

The working capital shows significant volatility over the periods analyzed. Beginning with a positive working capital of 2146 million USD in the first quarter of 2020, it then sharply declined to a negative value of -1482 million USD in the second quarter of 2020. Subsequently, the figure fluctuated, generally maintaining positive values through 2021 and early 2022, peaking at 3258 million USD in the second quarter of 2021. However, starting from the second quarter of 2023, the trend turned predominantly negative again, reaching a low of -773 million USD in the fourth quarter of 2023. The most recent quarters show mixed performance with a slight recovery to 93 million USD by the first quarter of 2025.

Net Sales

Net sales experienced a clear upward trajectory from early 2020 through 2022, increasing from 6613 million USD in the first quarter of 2020 to a peak of 10676 million USD by the second quarter of 2022. Following this peak, sales figures demonstrated variability but with an overall downward adjustment into 2023, fluctuating around the 7000 million USD mark. The most recent quarter in this period showed a level of 6803 million USD, indicating a moderate reduction compared to the peak but relatively stable in the context of the recent trend.

Working Capital Turnover

The working capital turnover ratio data is incomplete but indicates considerable variance when reported. High ratios such as 2087.46 in the third quarter of 2024 suggest periods of exceptionally efficient use of working capital, although such figures may be influenced by low or negative working capital values. Similarly, other elevated figures such as 69.01 in the first quarter of 2024 and 296.27 in the first quarter of 2025 point to potentially irregular or extraordinary operational conditions. Periods of more moderate turnover, such as 29.88 in the first quarter of 2021, suggest fluctuating efficiency in working capital management over time.

Inventory Turnover

The inventory turnover ratio exhibits considerable fluctuations over the observed periods. Starting from a level of 9.38 in the first reported quarter of 2021, the ratio increased notably to peak at 21.57 in the third quarter of 2022. This peak indicates a substantial acceleration in inventory turnover. Following this peak, the ratio declines gradually, reaching a level around 12.88 by the first quarter of 2025. Overall, the trend shows an initial strong improvement in the efficiency with which inventory is sold and replaced, followed by a tapering off and stabilization at a moderate turnover level.

Average Inventory Processing Period

The average inventory processing period, expressed in number of days, moves inversely to the inventory turnover ratio. Starting at 39 days in the first quarter of 2021, the period decreases steadily to 17 days by the third quarter of 2022, reflecting faster inventory processing. Following this minimum, the period gradually increases to around 29 days by the first quarter of 2025. This pattern confirms the earlier observation, where efficiency in inventory management improved considerably, then softened and stabilized at a somewhat higher processing duration than the trough.

Relationship and Insights

The inverse relationship between inventory turnover and average inventory processing periods is consistent and expected. The period of improved inventory efficiency corresponds to a lower number of days held, indicating better inventory management and potentially reduced holding costs. The later reversion towards longer processing days and lower turnover may suggest a strategic adjustment in inventory levels or changes in market demand and supply chain conditions. Overall, the data suggests a phase of significant operational improvement followed by normalization of inventory practices.

Receivables Turnover

The receivables turnover ratio initially showed a declining trend from 8.42 at the beginning of the observed period in March 2021 to a low of 5.31 by September 2022. Following this decline, the ratio experienced a significant improvement, peaking at 11.07 in December 2023. After this peak, the ratio again declined moderately but remained relatively stable, fluctuating between approximately 6.92 and 8.84 in the most recent quarters. This pattern suggests periods of fluctuating efficiency in collecting receivables, with a notable improvement towards the end of 2023 followed by some stabilization in subsequent periods.

Average Receivable Collection Period

The average receivable collection period inversely mirrored the receivables turnover trend over the same timeframe. It started with higher values, moving from 43 days in March 2021 up to a peak of 69 days by September 2022, indicating longer collection periods and possible delays in receiving payments. Thereafter, the collection period substantially decreased to a low of 33 days by September 2023, corresponding with the peak in turnover ratio. Post this improvement, the collection period increased slightly but remained contained within a mid-range level between 41 to 53 days through to March 2025. This reflects a general improvement in receivables management during the later periods, though some volatility persisted.

Overall Analysis

The data indicates that the company experienced challenges in receivables efficiency, particularly through late 2021 to late 2022, with increasing collection periods and declining turnover ratios. This situation reversed sharply at the end of 2023, with receivables turnover improving and collection days decreasing significantly, suggesting enhanced credit and collection policies or improved customer payment behaviors. From 2024 onward, the metrics stabilized but did not return fully to the most optimal levels seen at the end of 2023, implying a normalization phase following a period of operational adjustment.

Average Inventory Processing Period

The average inventory processing period showed a declining trend starting from 39 days at the end of March 2021, decreasing steadily to a low of 17 days in September 2022. Subsequently, it increased moderately to 25 days by December 2023 before experiencing slight fluctuations and reaching 28 days by March 2025. This indicates improvements in inventory turnover efficiency through mid-2022, followed by some variability and a modest extension in the inventory holding period thereafter.

Average Receivable Collection Period

The average receivable collection period varied notably over the observed intervals. Initially, it rose sharply from 43 days in March 2021 to a peak of 69 days in September 2022, suggesting slower collections during this period. After this peak, the period shortened significantly to 33 days by September 2023, representing an enhancement in receivables management. However, after September 2023, the collection period experienced a gradual increase again, reaching 48 days by March 2025, indicating some easing in collection efficiency in the most recent periods.

Operating Cycle

The operating cycle, which combines inventory processing and receivable collection periods, exhibited considerable volatility. It increased markedly from 82 days in March 2021 to a peak of 115 days by June 2021, reflecting an elongation of the overall cycle time. This was followed by a decline to 58 days in September 2023, implying enhanced operational efficiency. Following this improvement, the cycle lengthened again to 90 days in September 2024, then slightly shortened to 76 days by March 2025. These fluctuations point to periods of both operational pressure and recovery in managing inventory and receivables over the timeframe.

Payables Turnover

The payables turnover ratio began at 5.96 in the first reported quarter of 2021 and showed a downward trend to 4.83 in the subsequent quarter. It then exhibited a general upward trend, reaching a peak of 9.78 by December 2022. Following this peak, the ratio experienced fluctuations with values declining to 7.06 by December 2023, then slightly recovering to 7.29 in March 2025. Overall, the ratio increased significantly over the period, indicating a faster frequency of paying off payables during the central portion of the timeline, followed by a moderate slowing afterwards.

Average Payables Payment Period

The average payment period started at 61 days in March 2021, then increased to 76 days by June 2021, suggesting a lengthening of the time taken to settle payables. This was followed by a decrease to 37 days by December 2022, which corresponds inversely to the peak seen in payables turnover. After reaching this low point, the payment period increased again to around 49 days by December 2023. From that point forward, it showed a gradual declining trend, moving from 52 days in June 2024 to 50 days by March 2025. These changes imply a general improvement in the speed of payments toward the end of the period, despite some intermediate volatility.

Summary of Trends

The data reveals a clear inverse relationship between payables turnover and the average payment period, as expected. The high turnover and low payment period around late 2022 suggest an operational focus on rapid settlement of payables during this period. The subsequent moderation of turnover and slight increase in payment days suggest a strategic adjustment to a somewhat slower payments pace, potentially reflecting cash flow management considerations or supplier negotiations. The fluctuations in both indicators highlight dynamic management of payables over these years.

The analysis of the quarterly financial data reveals notable trends in the company's working capital management metrics, specifically focusing on inventory processing, receivable collection, payables payment periods, and the resulting cash conversion cycle.

Average Inventory Processing Period

The average inventory processing period shows a generally decreasing trend from the start of the recorded data in March 2021 at 39 days to a low of 17 days in September 2022. Following this low point, the period slightly fluctuates but largely remains stable within a range of approximately 21 to 29 days through to the end of the data in March 2025. This suggests improvements in inventory turnover efficiency until late 2022, with a modest lengthening of the processing period thereafter.

Average Receivable Collection Period

The receivable collection period demonstrates more variability. Beginning at 43 days in March 2021, it peaks at 69 days by September 2022, indicating a slower collection of receivables. Subsequently, there is a marked decrease to 33 days by September 2023, before a gradual increase again towards the end of the dataset, stabilizing around the high 40s to low 50s range. This fluctuation suggests periods of tightening and loosening in credit terms or collection effectiveness.

Average Payables Payment Period

This metric exhibits a declining trend from 61 days in March 2021, reaching a low point of 36 days in September 2022. After this trough, there is a progressive increase in the payment period, climbing to around 58 days by September 2024, then slightly dipping to 50 days by March 2025. This pattern may indicate an initial effort to reduce payment delays followed by a strategic extension of payables to improve liquidity in later periods.

Cash Conversion Cycle

The cash conversion cycle (CCC), which integrates the inventory, receivables, and payables periods, fluctuates but generally remains within a moderate range throughout the period. Starting at 21 days in March 2021, the CCC rises to a peak of 39 days by June 2021, followed by a general decline to about 15 days by September 2023, indicating improved overall working capital efficiency. After this improvement, the CCC slightly rises again, stabilizing around the mid-20-day range through March 2025. These movements suggest the company experienced periods of both compressed and extended cash flow cycles, likely reflecting changing operational or market conditions.