Liberty Oilfield Services Inc (LBRT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 17.44 | 15.55 | 17.67 | 8.01 | 19.53 |
| Receivables turnover | 25.13 | 7.08 | 6.06 | 2.85 | 7.87 |
| Payables turnover | 12.22 | 10.20 | 8.24 | 4.91 | 14.70 |
| Working capital turnover | 15.08 | 13.51 | 40.42 | 4.58 | 8.95 |
Activity ratios reflect how efficiently a company manages its assets and liabilities to generate sales.
Inventory turnover indicates Liberty Energy's ability to sell inventory. The increasing trend from 2019 to 2021 suggests improved inventory management efficiency before a slight decline in 2022 and a subsequent increase in 2023.
Receivables turnover measures how quickly the company collects outstanding payments. Liberty Energy's increasing trend indicates a more efficient collection process over the years.
Payables turnover shows how quickly the company pays its suppliers. The consistent increase in payables turnover implies that the company is managing its payables more efficiently, paying suppliers at a faster rate.
Working capital turnover reveals how effectively the company utilizes its working capital to generate sales. Liberty Energy's fluctuating working capital turnover indicates varying levels of efficiency in utilizing its working capital to generate revenue.
Overall, the improvement in receivables and payables turnover ratios indicates better management of receivables and payables, leading to increased efficiency and liquidity. The fluctuations in inventory turnover and working capital turnover ratios should be further analyzed to understand the underlying reasons for the changes and their impact on the company's overall performance.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 20.93 | 23.47 | 20.65 | 45.55 | 18.69 |
| Days of sales outstanding (DSO) | days | 14.52 | 51.55 | 60.19 | 127.99 | 46.38 |
| Number of days of payables | days | 29.87 | 35.77 | 44.31 | 74.27 | 24.83 |
Days of Inventory on Hand (DOH) measures how many days it takes for the company to sell its average inventory. A lower number indicates faster inventory turnover, which is generally seen as positive as it reduces the risk of obsolescence and holding costs. Liberty Energy Inc's DOH has fluctuated over the past five years, with a significant increase in 2020 followed by a decrease in 2021. In 2023, the DOH decreased further to 22.43 days, which suggests a more efficient management of inventory compared to the previous year.
Days of Sales Outstanding (DSO) reflects the average number of days it takes for the company to collect payment after a sale. A lower DSO is preferable as it indicates quicker collection of receivables. Liberty Energy Inc's DSO has shown some variation over the past five years, with a significant decrease in 2023 to 30.64 days. This suggests that the company has been able to collect payments from customers more efficiently, which can improve cash flow and liquidity.
Number of Days of Payables measures the average number of days it takes for the company to pay its suppliers. A higher number of days indicates the company is taking longer to pay its bills, which can be advantageous for cash flow management. Liberty Energy Inc's number of days of payables has also varied over the years, but showed a notable increase in 2020 followed by a decrease in 2021. In 2023, the number of days of payables decreased to 32.01 days, indicating that the company is paying its suppliers more quickly compared to the previous year.
In summary, Liberty Energy Inc has seen improvements in its activity ratios in 2023, with reduced days of inventory on hand, days of sales outstanding, and number of days of payables. These improvements suggest that the company is managing its inventory, receivables, and payables more efficiently, which can positively impact its overall operational performance and financial health.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.89 | 3.05 | 2.06 | 0.86 | 3.05 |
| Total asset turnover | 1.57 | 1.61 | 1.21 | 0.51 | 1.55 |
The long-term activity ratios of Liberty Energy Inc indicate the company's ability to generate sales relative to its fixed and total assets over the past five years.
The fixed asset turnover ratio has shown fluctuations over the period, ranging from 0.86 in 2020 to 3.05 in 2019. This ratio measures how efficiently the company utilizes its fixed assets to generate revenue. A higher fixed asset turnover ratio suggests that Liberty Energy is effectively using its fixed assets to generate sales, with the highest performance achieved in 2019.
In contrast, the total asset turnover ratio has also varied but generally increased over the period, from 0.51 in 2020 to 1.61 in 2022. This ratio reflects Liberty Energy's overall efficiency in utilizing all its assets to generate revenue. The upward trend indicates an improvement in the company's ability to generate sales relative to its total assets, reaching a peak in 2022.
Overall, the analysis of Liberty Energy Inc's long-term activity ratios suggests that the company has shown mixed performance in efficiently using its fixed and total assets to generate revenue over the past five years. The fluctuations in the ratios indicate the need for further examination to identify factors driving the changes and to assess the company's asset utilization strategies.