Liberty Oilfield Services Inc (LBRT)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company is managing its operations to generate revenue and manage its resources. Let's analyze the activity ratios of Liberty Energy Inc based on the provided data:

1. Inventory Turnover: This ratio measures how many times a company's inventory is sold and replaced over a period. Liberty Energy's inventory turnover has been consistently high over the quarters, indicating efficient management of inventory levels. The company is able to sell and replace its inventory quickly, which can help minimize carrying costs and reduce the risk of obsolescence.

2. Receivables Turnover: The receivables turnover ratio reflects how quickly a company collects its accounts receivables. A higher turnover implies that Liberty Energy is efficiently collecting payments from its customers. However, there is some fluctuation in this ratio over the quarters, suggesting potential variability in the company's credit policies or customer payment behavior.

3. Payables Turnover: This ratio assesses how fast a company pays its suppliers. Liberty Energy's payables turnover indicates that the company is extending its payment terms while managing its payables effectively. A higher turnover indicates that the company is taking longer to pay its suppliers, which can improve cash flow management.

4. Working Capital Turnover: The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales. Liberty Energy's working capital turnover has shown variations over the quarters, but generally, the company is effective in using its working capital to generate revenue. A higher turnover implies that the company is generating more sales with relatively lower working capital investment.

Overall, Liberty Energy Inc appears to have strong operational efficiency based on its activity ratios, with effective inventory management, receivables collection, and payables management. Monitoring these ratios over time can provide valuable insights into the company's operational performance and efficiency in utilizing its resources.

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Average number of days

The activity ratios for Liberty Energy Inc provide insights into the efficiency of the company's operations.

1. Days of inventory on hand (DOH):
The trend in DOH shows a gradual decrease from Q4 2022 to Q2 2023, indicating that the company has been managing its inventory more efficiently over time. A lower DOH reflects quicker turnover of inventory, which is generally preferable as it reduces holding costs and the risk of obsolescence.

2. Days of sales outstanding (DSO):
The DSO has been fluctuating over the quarters, with Q3 and Q4 of 2022 showing relatively high values compared to the subsequent quarters. A high DSO suggests that the company takes longer to collect its accounts receivable, which may impact cash flow and liquidity. The recent decrease in DSO from Q3 to Q4 2023 is a positive sign, possibly indicating improved collection practices.

3. Number of days of payables:
The number of days of payables has also shown variability across the quarters, with Q1 2022 having the highest value. A longer payment period may indicate favorable credit terms with suppliers; however, it could also suggest liquidity issues if the company is stretching payments beyond reasonable levels. The decrease in days of payables from Q1 to Q4 2023 may imply more timely payment practices or negotiation of improved terms with suppliers.

In summary, Liberty Energy Inc has been managing its inventory efficiently, demonstrating improvement in inventory turnover. While accounts receivable collection has shown some volatility, recent improvements in DSO are promising. Additionally, the company's payment practices have shown some variation, with a potential focus on optimizing cash flow through better management of payables.

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Long-term

Long-term activity ratios provide insights into how efficiently a company is utilizing its assets to generate revenue. Let's analyze Liberty Energy Inc's long-term activity ratios over the past eight quarters:

1. Fixed Asset Turnover:
- Liberty Energy Inc's fixed asset turnover has shown a generally increasing trend from Q1 2022 to Q4 2023, indicating that the company is generating more revenue relative to its investment in fixed assets. This suggests improved efficiency in utilizing its long-term assets to generate sales.
- The ratio has ranged from 2.22 to 3.23 over the period, with Q4 2023 showing the highest level of 3.23. This indicates that for every dollar invested in fixed assets, Liberty Energy Inc generated $3.23 in sales revenue during Q4 2023.

2. Total Asset Turnover:
- The total asset turnover ratio also demonstrates an increasing trend over the eight quarters, suggesting that the company is becoming more efficient in generating sales relative to its total assets.
- The ratio has fluctuated between 1.24 and 1.67, with Q4 2023 recording the highest level of 1.67. This indicates that for every dollar of total assets, Liberty Energy Inc generated $1.67 in sales during Q4 2023.

Overall, Liberty Energy Inc has been improving its efficiency in utilizing both fixed and total assets to generate sales revenue over the analyzed period. The increasing trend in both fixed asset turnover and total asset turnover ratios reflects positive operational performance in terms of asset utilization and revenue generation.