NOV Inc. (NOV)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	116.31	112.10	102.28	90.86	105.04
Days of sales outstanding (DSO)	days	81.01	87.71	87.29	76.36	79.85
Number of days of payables	days	48.88	56.02	47.03	31.56	34.19
Cash conversion cycle	days	148.44	143.79	142.53	135.66	150.71

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 116.31 + 81.01 – 48.88
= 148.44

The cash conversion cycle of NOV Inc shows a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle increased to 148.44 days, which was higher compared to the previous year's figure of 143.79 days. This indicates that NOV Inc took longer to convert its investments in inventory and accounts receivable into cash during the year.

Looking back further, in 2021 and 2022, the cash conversion cycle remained relatively stable at around 142-143 days. In 2020, there was a slight improvement as the cycle decreased to 135.66 days, indicating the company managed its cash, inventory, and receivables more efficiently. However, in 2019, the cycle increased significantly to 150.71 days, suggesting potential inefficiencies in managing working capital during that period.

Overall, NOV Inc's cash conversion cycle has shown some variability, with fluctuations in the efficiency of converting assets into cash. It will be important for the company to continue monitoring and improving its working capital management to optimize cash flow and operational efficiency.