Nabors Industries Ltd (NBR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 13.77 | 14.81 | 11.87 | 10.42 | 13.81 |
| Receivables turnover | 8.19 | 7.24 | 6.39 | 5.73 | 6.56 |
| Payables turnover | 6.91 | 6.03 | 5.91 | 7.57 | 8.25 |
| Working capital turnover | 6.60 | 5.86 | 2.53 | 4.22 | 5.92 |
The activity ratios for Nabors Industries Ltd indicate the efficiency of the company in managing its inventory, receivables, payables, and working capital over the past five years.
1. Inventory turnover:
- The inventory turnover has shown fluctuations over the years but generally indicates that the company has been efficient in selling its inventory.
- The inventory turnover has improved from 8.30 in 2020 to 13.02 in 2022, suggesting a better ability to convert inventory into sales.
2. Receivables turnover:
- The receivables turnover ratio measures how efficiently the company collects payments from its customers.
- The trend shows a consistent improvement, with the ratio increasing from 5.88 in 2019 to 8.64 in 2023, indicating the company has been collecting payments more quickly.
3. Payables turnover:
- The payables turnover ratio reflects how quickly the company pays its suppliers.
- The ratio has shown some volatility but remained relatively stable over the years, ranging from 5.07 in 2021 to 6.54 in 2019.
4. Working capital turnover:
- The working capital turnover ratio assesses how effectively the company utilizes its working capital to generate sales revenue.
- The ratio has shown variations but generally improved from 3.46 in 2020 to 6.96 in 2023, suggesting better efficiency in utilizing working capital to drive sales.
Overall, the activity ratios of Nabors Industries Ltd demonstrate improving efficiency in managing inventory, receivables, payables, and working capital over the years, implying positive trends in the company's operational performance and financial management.
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 | 26.52 | 24.65 | 30.76 | 35.04 | 26.43 |
| Days of sales outstanding (DSO) | days | 44.55 | 50.41 | 57.12 | 63.71 | 55.61 |
| Number of days of payables | days | 52.82 | 60.51 | 61.73 | 48.21 | 44.24 |
Days of Inventory on Hand (DOH) measures how long, on average, inventory is held before being sold. A lower DOH indicates efficient inventory management. Nabors Industries Ltd has shown improvement in managing inventory over the years, with the DOH decreasing from 43.97 days in 2020 to 30.13 days in 2023.
Days of Sales Outstanding (DSO) reflects how long it takes to collect revenue after a sale. A lower DSO is favorable as it implies faster cash conversion. Nabors Industries Ltd has managed to reduce its DSO from 62.08 days in 2020 to 42.24 days in 2023, indicating better credit management and collection efficiency.
Number of Days of Payables measures how long a company takes to pay its suppliers. A higher number indicates that the company is taking longer to pay its obligations. Nabors Industries Ltd has varied in its payment cycle, with the number of days of payables ranging from 55.84 days in 2019 to 71.97 days in 2021. However, the number decreased to 60.03 days in 2023, indicating a potential improvement in managing supplier payments.
Overall, the trend in Nabors Industries Ltd's activity ratios suggests a positive direction in terms of managing inventory, collecting receivables, and paying suppliers efficiently over the years.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.98 | 0.78 | 0.74 | 0.65 | 0.71 |
| Total asset turnover | 0.54 | 0.50 | 0.45 | 0.47 | 0.52 |
Nabors Industries Ltd's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, have fluctuated over the past five years.
The fixed asset turnover ratio, which measures how efficiently the company generates sales from its fixed assets, has shown an upward trend from 0.62 in 2019 to 1.04 in 2023. This indicates that the company is utilizing its fixed assets more efficiently to generate revenue.
On the other hand, the total asset turnover ratio measures how well the company is utilizing its total assets to generate revenue. This ratio has shown mixed results, with a slight increase from 0.39 in 2020 to 0.57 in 2023, but with fluctuations in between.
Overall, the company's fixed asset turnover has improved significantly, indicating better efficiency in utilizing fixed assets to generate revenue. However, the total asset turnover ratio has shown more volatility, suggesting varying levels of efficiency in utilizing total assets for revenue generation. Further analysis would be needed to understand the factors driving these changes and their implications for the company's long-term operational efficiency.