Nabors Industries Ltd (NBR)
Cash conversion cycle
| 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 |
| Cash conversion cycle | days | 17.48 | 18.24 | 14.56 | 26.15 | 50.54 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 21.59 + 49.21 – 53.32
= 17.48
The cash conversion cycle of Nabors Industries Ltd has shown a decreasing trend over the years, indicating an improvement in the company's efficiency in managing its working capital. In 2020, the cash conversion cycle was 50.54 days, which decreased to 26.15 days by the end of 2021, showing a significant reduction.
By the end of 2022, the cash conversion cycle further decreased to 14.56 days, reflecting the company's ability to convert its inventory and accounts receivable into cash more quickly. However, by the end of 2023, there was a slight increase to 18.24 days, suggesting a temporary slowdown in the cash conversion process.
In 2024, the cash conversion cycle remained relatively stable at 17.48 days, indicating that the company was able to maintain its efficiency in managing working capital. Overall, the decreasing trend in the cash conversion cycle is a positive sign for Nabors Industries Ltd, as it indicates improved liquidity and effective management of operating cycle activities.
Peer comparison
Dec 31, 2024