Max Petroleum (LSE:MXP) Cash Conversion Cycle: -97.50 (As of Sep. 2014)


What is Max Petroleum Cash Conversion Cycle?

Max Petroleum LSE:MXP Cash Conversion Cycle is -97.50 as of Sep. 2014. The stock has 6 warning signs investors should review.

Cash Conversion Cycle is one of several measures of management effectiveness. It equals Days Sales Outstanding + Days Inventory - Days Payable.

Max Petroleum's Days Sales Outstanding for the six months ended in Sep. 2014 was 0.
Max Petroleum's Days Inventory for the six months ended in Sep. 2014 was 27.93.
Max Petroleum's Days Payable for the six months ended in Sep. 2014 was 125.43.
Therefore, Max Petroleum's Cash Conversion Cycle (CCC) for the six months ended in Sep. 2014 was -97.50.

Max Petroleum  (LSE:MXP) Cash Conversion Cycle Explanation

Generally, the lower this number is, the better for the company. Although it should be combined with other metrics (such as ROE % and ROA %), it can be especially useful for comparing close competitors, because the company with the lowest CCC is often the one with better management.

Be Aware

CCC is most effective with retail-type companies, which have inventories that are sold to customers. Consulting businesses, software companies and insurance companies are all examples of companies for whom this metric is meaningless.

The CCC is one of several tools that can help you evaluate management, especially if it is calculated for several consecutive time periods and for several competitors. Decreasing or steady CCCs are good, while rising ones should motivate you to dig a bit deeper.

Max Petroleum Cash Conversion Cycle Related Terms

Max Petroleum Cash Conversion Cycle Historical Data

* Premium members only.

The historical data trend for Max Petroleum's Cash Conversion Cycle can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Max Petroleum Cash Conversion Cycle Chart

Max Petroleum Annual Data
Trend Mar06 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14
Cash Conversion Cycle
Get a 7-Day Free Trial Premium Member Only 134.52 123.19 89.61 24.51 -6.71

Max Petroleum Semi-Annual Data
Sep06 Mar07 Sep07 Mar08 Sep08 Mar09 Sep09 Mar10 Sep10 Mar11 Sep11 Mar12 Sep12 Mar13 Sep13 Mar14 Sep14
Cash Conversion Cycle Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 9.00 42.97 4.78 -14.63 -97.50

Max Petroleum Cash Conversion Cycle Competitor Comparison

For the Oil & Gas E&P subindustry, Max Petroleum's Cash Conversion Cycle, along with its competitors' market caps and Cash Conversion Cycle data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Max Petroleum Cash Conversion Cycle vs Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Max Petroleum's Cash Conversion Cycle distribution charts can be found below:

* The bar in red indicates where Max Petroleum's Cash Conversion Cycle falls into.


Max Petroleum Cash Conversion Cycle Calculation

Cash Conversion Cycle (CCC) measures how fast a company can convert cash on hand into even more cash on hand. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties.

Cash Conversion Cycle is one of several measures of management effectiveness.

Max Petroleum's Cash Conversion Cycle for the fiscal year that ended in Mar. 2014 is calculated as

Cash Conversion Cycle=Days Sales Outstanding +Days Inventory-Days Payable
=0+23.22-29.93
=-6.71

Max Petroleum's Cash Conversion Cycle for the quarter that ended in Sep. 2014 is calculated as:

Cash Conversion Cycle=Days Sales Outstanding+Days Inventory-Days Payable
=0+27.93-125.43
=-97.50

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Frequently Asked Questions Learn more about Cash Conversion Cycle →
What does a Cash Conversion Cycle of -97.50 mean?
Max Petroleum (LSE:MXP) has a Cash Conversion Cycle of -97.50 as of Sep. 2014. Cash conversion cycle equals sum of days inventory and days sales outstanding less days payable. View historical data on Max Petroleum and its competitors.
Is Max Petroleum's Cash Conversion Cycle too high?
Max Petroleum's current Cash Conversion Cycle is -97.50.
How does Max Petroleum's Cash Conversion Cycle compare to competitors?
Max Petroleum's Cash Conversion Cycle of -97.50 can be compared against companies in the Oil & Gas industry. The industry median Cash Conversion Cycle is 18.26. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Cash Conversion Cycle for an Oil & Gas company?
The median Cash Conversion Cycle among Oil & Gas companies is 18.26, based on 916 companies in the industry. Companies in the top quartile (top 25%) have a Cash Conversion Cycle significantly above this median, while those in the bottom quartile fall well below. However, Cash Conversion Cycle should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Cash Conversion Cycle mean?
A high Cash Conversion Cycle can signal that a stock is expensive relative to its fundamentals. Cash conversion cycle equals sum of days inventory and days sales outstanding less days payable. View historical data on Max Petroleum and its competitors. For the Oil & Gas industry, the median Cash Conversion Cycle is 18.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Max Petroleum's current Cash Conversion Cycle is -97.50. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Max Petroleum stock overvalued right now?
Max Petroleum (LSE:MXP) has a current Cash Conversion Cycle of -97.50. The current Cash Conversion Cycle is -97.50. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Cash Conversion Cycle calculated?
Cash Conversion Cycle is calculated from a company's financial statements. For Max Petroleum (LSE:MXP), the current Cash Conversion Cycle is -97.50 as of Sep. 2014. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.

Max Petroleum Business Description

Industry EnergyOil & Gas
Address 4th Floor, Ergon House, Dean Bradley Street, London, GBR, SW1P 2AL
Max Petroleum Plc is an independent oil and gas exploration and production company. The company is engaged in the business of exploration, development, and production of oil and gas assets within the Republic of Kazakhstan. The group owns the exploration and production rights to the Blocks A&E License, which comprises two onshore blocks extending over 12,455 km2 in the Pre-Caspian Basin in Western Kazakhstan.