Pioneer Natural Resources Co. (NYSE:PXD)

Inventory Turnover

The inventory turnover ratio exhibits considerable fluctuations over the period. Starting at 47.18 in 2019, it decreased to 31.36 in 2020, then sharply increased to a peak of 57.51 in 2022 before declining again to 40.7 in 2023. This pattern suggests variability in the efficiency of inventory management with a notable improvement in 2022.

Receivables Turnover

The receivables turnover ratio shows a generally upward trend from 9.34 in 2019 to a peak of 13.16 in 2022, followed by a slight decline to 12.18 in 2023. This indicates an overall improvement in the company's ability to collect receivables efficiently, though there is a minor easing in 2023.

Payables Turnover

Payables turnover remains relatively stable with minor variations. It decreased slightly from 7.92 in 2019 to 7.51 in 2021, surged to 9.8 in 2022, and then decreased to 8.03 in 2023. The spike in 2022 may reflect changes in payment practices or supplier terms during that year.

Working Capital Turnover

Data is only available for 2020 and 2021, showing a decrease from 10.19 to 8.51. The lack of data for other years limits trend analysis, but the reduction may imply less efficient use of working capital in 2021 compared to 2020.

Average Inventory Processing Period

The average inventory processing period decreased from 8 days in 2019 to 6 days in 2022, reflecting faster inventory turnover. However, it increased again to 9 days in 2023, suggesting a slowing in inventory movement or accumulation of stock.

Average Receivable Collection Period

This metric improved steadily from 39 days in 2019 to a low of 28 days in 2022, indicating faster collection processes. A slight increase to 30 days in 2023 points to a small reduction in collection efficiency but remains better than earlier years.

Operating Cycle

The operating cycle duration decreased overall, from 47 days in 2019 to 34 days in 2022, signifying improved operational efficiency in managing inventory and receivables. It increased again to 39 days in 2023, indicating a minor reversal in this efficiency trend.

Average Payables Payment Period

The average payables payment period increased gradually from 46 days in 2019 to 49 days in 2021, dropped significantly to 37 days in 2022, then rose again to 45 days in 2023. The sharp decline in 2022 could denote faster payments to suppliers, while the subsequent rise indicates a return toward prior payment practices.

Cash Conversion Cycle

The cash conversion cycle data reveals improvement from 1 day in 2019 to negative values in later years, reaching -7 days in 2021 and maintaining negative values through 2023. Negative cash conversion cycle values indicate that the company collects cash from sales before paying its suppliers, reflecting strong liquidity management and efficient working capital use.

Revenue from contracts with purchasers

The revenue demonstrated notable variability over the analyzed period. Starting at 9,671 million US dollars in 2019, there was a decline in 2020 to 7,024 million US dollars, possibly reflecting external market conditions. A pronounced recovery followed in 2021 and 2022, with revenue escalating sharply to 17,870 million and 24,384 million US dollars respectively. However, in 2023, a decrease occurred, bringing revenue down to 19,374 million US dollars, indicating some volatility in income generation.

Inventories

Inventories showed a steady upward trend throughout the period. Beginning at 205 million US dollars in 2019, inventory levels increased gradually each year, reaching 476 million US dollars by the end of 2023. This continuous growth may suggest accumulating stock, potentially tied to higher production or strategic stockpiling in response to market demand expectations.

Inventory turnover

Inventory turnover exhibited fluctuations over the timeframe. The turnover ratio was 47.18 in 2019, declined considerably to 31.36 in 2020, which might indicate slower inventory movement or increased stock levels relative to sales during that year. It then rose sharply to 48.43 in 2021 and peaked at 57.51 in 2022, suggesting improved efficiency in managing and selling inventory. Nevertheless, the ratio declined again to 40.7 in 2023, reflecting a reduction in turnover efficiency compared to the previous year.

The financial data reveals significant variations and trends over the five-year period.

Revenue from contracts with purchasers

The revenue displayed a decline from 2019 to 2020, decreasing from 9,671 million US dollars to 7,024 million US dollars. This was followed by a substantial increase in 2021 and 2022, reaching 17,870 million and 24,384 million US dollars respectively. However, in 2023, there was a notable decrease to 19,374 million US dollars. This indicates volatility in revenue performance with strong recovery after 2020 but some retreat in the last reported year.

Accounts receivable, net

The accounts receivable, net showed a general upward trend over the period, starting at 1,035 million US dollars in 2019 and increasing to 1,685 million in 2021, peaking at 1,853 million in 2022 before slightly declining to 1,590 million in 2023. The rise in receivables correlates with the increase in revenue, although the slight drop in 2023 aligns with the revenue decrease.

Receivables turnover

The receivables turnover ratio improved each year from 2019 to 2022, climbing from 9.34 times in 2019 to a peak of 13.16 times in 2022, indicating enhanced efficiency in collecting receivables. In 2023, the ratio decreased to 12.18 times but remained higher than the levels observed in 2019 through 2021.

Overall, the data suggests a recovery in financial performance after a downturn in 2020, with increasing revenue and improving efficiency in receivables management through 2022. The decline in both revenue and receivables turnover in 2023 warrants attention to potential underlying factors affecting sales and collection processes.

The financial data reveals distinct patterns in revenue, accounts payable, and payables turnover over the five-year period.

Revenue from contracts with purchasers

Revenue experienced a significant fluctuation across the years. It decreased notably from approximately 9.7 billion USD in 2019 to about 7.0 billion USD in 2020, indicating a contraction possibly due to external market conditions or operational factors. However, revenue sharply rebounded in 2021, reaching approximately 17.9 billion USD, and continued increasing to roughly 24.4 billion USD in 2022, representing a substantial growth period. In 2023, revenue decreased again to about 19.4 billion USD, suggesting a potential market correction or other challenges following the prior peak.

Accounts payable, trade

Accounts payable showed an increasing trend from under 1.3 billion USD in 2019 and 2020 to approximately 2.4 billion USD during 2021-2023. The most significant increase occurred between 2020 and 2021, correlating with the jump in revenue. This rise in accounts payable could reflect increased purchases or extended payment terms in line with operational growth.

Payables turnover ratio

The payables turnover ratio remained relatively stable with slight fluctuations. It started at 7.92 in 2019, decreased gradually to 7.51 in 2021, then rose sharply to 9.8 in 2022 before dropping to 8.03 in 2023. The spike in 2022 indicates a faster payment cycle during this period, potentially reflecting more efficient management of payables or changing supplier terms. The following year saw a moderate decrease, suggesting a partial return to prior payment patterns.

The financial data reveals several significant trends over the analyzed periods, indicating fluctuations in liquidity and sales efficiency alongside revenue dynamics.

Working Capital

Working capital exhibited considerable volatility between 2019 and 2023. It started with a negative balance of -305 million USD in 2019, then sharply improved to a positive 689 million USD in 2020 and further increased to 2,100 million USD in 2021. However, it reversed direction in 2022, dropping back to a negative -161 million USD and further declining to -369 million USD in 2023. This pattern suggests significant changes in the company's short-term liquidity management or operational financing needs over the period.

Revenue from Contracts with Purchasers

Revenue demonstrated an overall upward trend with some fluctuations. Starting at 9,671 million USD in 2019, revenue decreased to 7,024 million USD in 2020, likely reflecting external challenging conditions. Subsequently, revenue rebounded strongly, rising to 17,870 million USD in 2021 and peaking at 24,384 million USD in 2022 before declining to 19,374 million USD in 2023. The large increase during 2021-2022 indicates robust sales growth, while the decline in 2023 could signal market or operational challenges.

Working Capital Turnover

Data on the working capital turnover ratio is limited, available only for 2020 and 2021. In 2020, the ratio was notably high at 10.19, indicating efficient use of working capital to generate sales. However, this ratio decreased to 8.51 in 2021, suggesting a relative decline in the efficiency of working capital utilization despite rising revenue. The absence of data for other years prevents a full trend analysis but indicates some variability in operational efficiency during the available periods.

In conclusion, the company experienced significant volatility in working capital levels, with a notable shift back to negative working capital in recent years. Revenue showed strong growth post-2020, although it tapered in the latest period. The working capital turnover additionally suggests fluctuating efficiency in converting working capital into sales. These patterns highlight potential areas for focus on liquidity management and operational efficiency going forward.

Inventory Turnover

The inventory turnover ratio exhibited notable fluctuations over the five-year period. Beginning at 47.18 in 2019, it declined significantly to 31.36 in 2020, indicating a slower rate of inventory movement during that year. Subsequently, the ratio increased markedly to 48.43 in 2021 and further improved to a peak of 57.51 in 2022, reflecting enhanced efficiency in inventory management or increased sales activity. However, in 2023, the turnover decreased again to 40.7, suggesting a reduction in the rate at which inventory was converted into sales compared to the prior two years, but still higher than the 2020 level.

Average Inventory Processing Period

The average time taken to process inventory demonstrated an inverse trend to the inventory turnover ratio, as expected. It increased from 8 days in 2019 to 12 days in 2020, consistent with the reduction in inventory turnover during that year. Thereafter, the period shortened to 8 days in 2021 and further decreased to 6 days in 2022, indicating faster inventory processing and improved operational efficiency. In 2023, the period extended again to 9 days, which aligns with the observed decrease in inventory turnover, suggesting a slight slowdown in inventory movement relative to the previous two years.

Receivables Turnover

The receivables turnover ratio exhibited a generally upward trend from 2019 to 2023. Beginning at 9.34 in 2019, the ratio increased each year until peaking at 13.16 in 2022, before slightly decreasing to 12.18 in 2023. This trend indicates an improvement in the efficiency of the company’s credit and collections processes over the period, reflecting a faster conversion of receivables into cash. The slight decline in 2023, nonetheless, suggests a mild reduction in collection efficiency compared to the previous year.

Average Receivable Collection Period

The average receivable collection period showed a consistent decline from 39 days in 2019 to a low of 28 days in 2022, followed by a small increase to 30 days in 2023. This pattern aligns inversely with the receivables turnover ratio, confirming that the company was able to shorten the duration required to collect receivables over time, enhancing liquidity. The marginal rise in days in 2023 might indicate a slight relaxation in credit policies or slower customer payments.

Summary

Overall, the data reflects a positive trend in managing accounts receivable, with steadily improving turnover ratios and decreasing collection periods from 2019 through 2022, signaling stronger cash flow management. The minor reversals in 2023 warrant attention to potential shifts in credit terms or collection effectiveness. Maintaining or improving these metrics would be beneficial for the company’s working capital management moving forward.

Average inventory processing period

The average inventory processing period showed variability over the analyzed years. Starting at 8 days in 2019, it increased to 12 days in 2020, indicating a slower inventory turnover during this period. Subsequently, it improved significantly to 8 days in 2021 and further decreased to 6 days in 2022, reflecting enhanced efficiency in inventory management. However, in 2023, this period rose again to 9 days, suggesting a slight slowdown in inventory processing compared to the previous year.

Average receivable collection period

The average receivable collection period exhibited a consistent downward trend from 2019 through 2022. It decreased from 39 days in 2019 to 36 days in 2020, then to 34 days in 2021, and further reduced to 28 days in 2022, indicating improved efficiency in accounts receivable collection processes. In 2023, there was a minor increase to 30 days, although the level remained better than the initial years.

Operating cycle

The operating cycle decreased over the years, reflecting improvements in the overall effectiveness of the company's working capital management. It was 47 days in 2019 and increased slightly to 48 days in 2020, likely influenced by the longer inventory period that year. From 2021 onwards, the operating cycle shortened notably to 42 days and then to 34 days in 2022, showing a more rapid conversion of resources into cash. In 2023, the operating cycle increased slightly to 39 days but maintained a substantially lower level compared to the earlier years.

Payables Turnover

The payables turnover ratio exhibited relative stability from 2019 through 2021, with values ranging narrowly between 7.51 and 7.92. In 2022, there was a noticeable increase to 9.8, indicating a significant acceleration in the rate at which the company settled its payables during that year. This heightened turnover was not sustained into 2023, as evidenced by a decline to 8.03, although this ratio remained higher than the levels seen in the 2019 to 2021 period. Overall, the trend suggests that 2022 marked a year of increased efficiency in managing payables, followed by a partial reversion towards previous turnover levels in 2023.

Average Payables Payment Period

The average payables payment period generally moved in the opposite direction to the payables turnover, spanning from 46 days in 2019 to a peak of 49 days in 2021. This increase in days payable outstanding indicates a lengthening of the payment cycle during the initial years. In 2022, there was a marked reduction to 37 days, consistent with the sharp rise in payables turnover, reflecting faster payment processing. In 2023, the payment period lengthened again to 45 days, aligning with the modest decrease in turnover ratio. The fluctuations in the payment period imply a strategic adjustment in the company's payment practices, with a more aggressive payment approach in 2022, followed by a relaxation towards prior norms the following year.

Average Inventory Processing Period

The average inventory processing period exhibited variability over the five-year span. It increased from 8 days in 2019 to a peak of 12 days in 2020, suggesting a slower turnover of inventory during that year. Subsequently, the period decreased to 8 days in 2021 and reached a low of 6 days in 2022, indicating improved efficiency in inventory handling. However, it rose again slightly to 9 days in 2023, reflecting a modest slowdown relative to the previous year.

Average Receivable Collection Period

The average receivable collection period demonstrated a consistent downward trend from 2019 through 2022, decreasing from 39 days to 28 days. This indicates the company was able to collect its receivables more quickly over this period. In 2023, there was a slight increase to 30 days, suggesting a minor lengthening in the time taken to collect receivables compared to 2022, but still lower than the initial years.

Average Payables Payment Period

The average payables payment period fluctuated during the period analyzed. Beginning at 46 days in 2019, it increased slightly each year to reach a high of 49 days in 2021. This suggests the company took longer to pay its suppliers during those years. In 2022, there was a significant decrease to 37 days, indicating quicker payment. The period then rose to 45 days in 2023, partly reversing the previous year's acceleration in payments but remaining below the earlier peak.

Cash Conversion Cycle

The cash conversion cycle showed notable improvements. Starting at 1 day in 2019, the data for 2020 is missing. From 2021 onwards, the cycle turned negative, reaching -7 days in 2021, improving to -3 days in 2022, and further decreasing to -6 days in 2023. A negative cash conversion cycle implies that the company collects cash from customers before it needs to pay its suppliers, which can enhance liquidity and operational efficiency.