Halliburton Company (HAL)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	0.13	0.08	0.24	0.10	1.92
Receivables turnover	4.48	4.74	4.38	4.17	4.65
Payables turnover	0.12	0.08	0.22	0.10	2.86
Working capital turnover	3.62	3.88	3.61	2.71	2.83

Based on the provided data for Halliburton Company's activity ratios, we can observe the following trends:

1. Inventory Turnover: The inventory turnover ratio measures how efficiently a company manages its inventory. Halliburton's inventory turnover has been fluctuating over the years, starting at 1.92 in 2020, dropping significantly to 0.10 in 2021, and gradually increasing to 0.24 in 2022, but then decreasing to 0.08 in 2023 and slightly improving to 0.13 in 2024. These fluctuations may indicate challenges in managing inventory levels relative to sales.

2. Receivables Turnover: The receivables turnover ratio reflects how well a company collects outstanding receivables. Halliburton's receivables turnover has remained relatively stable over the years, ranging from 4.17 in 2021 to 4.74 in 2023. A consistent and relatively high turnover ratio suggests effective credit management and timely collection of receivables.

3. Payables Turnover: The payables turnover ratio indicates how quickly a company pays its suppliers. Halliburton's payables turnover decreased significantly from 2.86 in 2020 to 0.10 in 2021, and then remained low but relatively stable at around 0.10 to 0.12 in the following years. A low payables turnover ratio could indicate longer payment periods to suppliers, potential liquidity issues, or negotiation of favorable payment terms.

4. Working Capital Turnover: The working capital turnover ratio evaluates how efficiently a company utilizes its working capital to generate revenue. Halliburton's working capital turnover has shown a positive trend, increasing from 2.83 in 2020 to 3.88 in 2023 before slightly decreasing to 3.62 in 2024. A higher turnover ratio suggests effective utilization of working capital to support business operations and generate sales.

In conclusion, Halliburton's activity ratios indicate mixed performance in inventory management, relatively stable receivables turnover, low payables turnover, and improving working capital turnover. Further analysis in conjunction with other financial metrics would provide a more comprehensive assessment of the company's financial performance and operational efficiency.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	2,830.61	4,599.57	1,532.90	3,651.55	190.28
Days of sales outstanding (DSO)	days	81.39	77.06	83.37	87.46	78.49
Number of days of payables	days	2,969.35	4,486.93	1,636.73	3,639.17	127.42

Based on the provided data for Halliburton Company's activity ratios:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand measures how many days it takes for the company to sell its entire inventory.
- Halliburton's DOH has shown significant fluctuations over the years, ranging from 190.28 days in 2020 to 4,599.57 days in 2023.
- The high number of days in inventory in certain years indicates that Halliburton may have been holding excess inventory, which could tie up cash and lead to potential obsolescence.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding ratio reflects the average number of days it takes for Halliburton to collect its accounts receivables.
- Halliburton's DSO has ranged from 78.49 days in 2020 to 81.39 days in 2024, suggesting a relatively stable collection cycle.
- A lower DSO value indicates that Halliburton has efficient collections practices, helping to improve cash flow and liquidity.

3. Number of Days of Payables:
- The number of days of payables ratio measures the average number of days Halliburton takes to pay its suppliers.
- Halliburton's days of payables have fluctuated significantly, from 127.42 days in 2020 to 4,486.93 days in 2023.
- A high number of days of payables can indicate that Halliburton is taking longer to pay its suppliers, potentially straining supplier relationships but also improving cash flow management.

Overall, the analysis of these activity ratios indicates varying trends in inventory management, accounts receivable collection, and accounts payable practices at Halliburton Company.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	4.49	4.70	4.66	3.54	3.30
Total asset turnover	0.90	0.93	0.87	0.69	0.69

Halliburton Company's long-term activity ratios provide insights into the efficiency of the company in managing its assets over time. The fixed asset turnover ratio measures how efficiently the company generates revenue from its fixed assets. From 2020 to 2024, Halliburton's fixed asset turnover improved steadily from 3.30 to 4.49. This indicates that the company was able to generate more revenue for each dollar invested in fixed assets, reflecting improved asset utilization and efficiency.

Total asset turnover ratio, on the other hand, evaluates the company's ability to generate sales from its total assets. Halliburton's total asset turnover remained relatively stable at around 0.69 in 2020 and 2021 but showed a significant improvement to 0.90 by the end of 2024. This increase suggests that the company became more effective in utilizing all its assets to generate revenue over the period.

Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that Halliburton Company has been improving its asset management efficiency and generating more revenue per dollar of assets invested, which can be viewed as positive signs of financial health and operational effectiveness in the long term.