Nabors Industries Ltd (NBR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 16.91 | 13.77 | 14.81 | 11.87 | 10.42 |
| Receivables turnover | 7.42 | 8.19 | 7.24 | 6.39 | 5.73 |
| Payables turnover | 6.85 | 6.91 | 6.03 | 5.91 | 7.57 |
| Working capital turnover | 6.73 | 6.60 | 5.86 | 2.53 | 4.22 |
Nabors Industries Ltd has shown an improving trend in its inventory turnover ratio over the years, from 10.42 in 2020 to 16.91 in 2024. This indicates that the company is selling its inventory more efficiently, with products moving off the shelves at a faster rate.
In terms of receivables turnover, the company has also seen a positive trend, increasing from 5.73 in 2020 to 7.42 in 2024. This suggests that Nabors is collecting its accounts receivable more quickly, which is beneficial for maintaining healthy cash flows.
On the other hand, the payables turnover ratio fluctuated between 5.91 and 7.57 from 2020 to 2024, indicating that the time taken by the company to pay its suppliers has varied. However, the ratio generally remained within a reasonable range, which could imply a consistent approach to managing trade payables.
The working capital turnover ratio has shown a mixed trend, decreasing from 4.22 in 2020 to 2.53 in 2021, but then increasing significantly to 6.73 in 2024. This suggests that the company has been more effective in utilizing its working capital to generate revenue in recent years.
Overall, based on the activity ratios, Nabors Industries Ltd has demonstrated improvements in managing its inventory, receivables, and working capital, which could potentially lead to enhanced operational efficiency and financial performance.
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 | 21.59 | 26.52 | 24.65 | 30.76 | 35.04 |
| Days of sales outstanding (DSO) | days | 49.21 | 44.55 | 50.41 | 57.12 | 63.71 |
| Number of days of payables | days | 53.32 | 52.82 | 60.51 | 61.73 | 48.21 |
Based on the activity ratios for Nabors Industries Ltd, we observed the following trends over the years:
1. Days of Inventory on Hand (DOH):
- The company's DOH decreased from 35.04 days as of December 31, 2020, to 21.59 days as of December 31, 2024.
- A decreasing trend in DOH is generally positive as it indicates that the company is managing its inventory more efficiently and turning over its inventory faster.
2. Days of Sales Outstanding (DSO):
- The DSO decreased from 63.71 days as of December 31, 2020, to 49.21 days as of December 31, 2024.
- A decreasing DSO suggests that the company is collecting its accounts receivable more quickly, which can improve cash flow and liquidity.
3. Number of Days of Payables:
- The number of days of payables fluctuated over the years, ranging from 48.21 days as of December 31, 2020, to 61.73 days as of December 31, 2021.
- A higher number of days of payables may indicate that the company is taking longer to pay its suppliers, which could be beneficial for cash flow management in the short term.
Overall, the decreasing trends in both DOH and DSO are positive indicators of efficiency in managing inventory and collecting receivables. However, the fluctuation in the number of days of payables may warrant further investigation to understand the company's supplier payment practices and cash flow management strategies.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.02 | 0.98 | 0.78 | 0.74 | 0.65 |
| Total asset turnover | 0.64 | 0.54 | 0.50 | 0.45 | 0.47 |
Nabors Industries Ltd's long-term activity ratios, specifically the Fixed Asset Turnover and Total Asset Turnover, have shown an improving trend over the past five years.
The Fixed Asset Turnover ratio, which indicates the efficiency of the company in generating revenue from its fixed assets, increased from 0.65 in December 31, 2020, to 1.02 in December 31, 2024. This indicates that the company has been able to generate more revenue from its fixed assets as time progressed, potentially through better utilization or management of these assets.
Similarly, the Total Asset Turnover ratio, which measures how efficiently the company is using its total assets to generate revenue, also improved from 0.47 in December 31, 2020, to 0.64 in December 31, 2024. This suggests that Nabors Industries Ltd has been more effective in utilizing all its assets to generate sales over the years.
Overall, the increasing trend in both Fixed Asset Turnover and Total Asset Turnover ratios indicates that Nabors Industries Ltd has been able to enhance its operational efficiency and productivity in the use of its assets for revenue generation over the long term.