Nabors Industries Ltd (NBR)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,197,690 | 2,034,530 | 1,894,440 | 1,500,460 | 1,672,550 |
| Inventory | US$ in thousands | 129,979 | 147,798 | 127,947 | 126,448 | 160,585 |
| Inventory turnover | 16.91 | 13.77 | 14.81 | 11.87 | 10.42 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,197,690K ÷ $129,979K
= 16.91
To analyze Nabors Industries Ltd's inventory turnover over the five-year period from 2020 to 2024, we observe a consistent increase in the ratio. The inventory turnover ratio measures how efficiently the company is managing its inventory by indicating how many times the inventory is sold and replaced during a certain period.
In December 2020, the inventory turnover ratio was 10.42, indicating that the company sold and replaced its inventory approximately 10.42 times during that year. Over the subsequent years, there was a steady improvement in this metric, with the ratio climbing to 11.87 in 2021, 14.81 in 2022, 13.77 in 2023, and peaking at 16.91 in 2024.
The rise in the inventory turnover ratio signifies that Nabors Industries Ltd is becoming more efficient in managing its inventory levels. A higher inventory turnover ratio implies that the company is selling its products more quickly, which can reduce holding costs, minimize obsolete inventory, and free up cash flow for other purposes.
Overall, the increasing trend in Nabors Industries Ltd's inventory turnover ratio from 2020 to 2024 reflects positively on the company's inventory management efficiency and operational effectiveness. It suggests that the company is improving its inventory control processes and successfully meeting customer demand while keeping its inventory investment at an optimal level.
Peer comparison
Dec 31, 2024