NOV Inc. (NOV)
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 | 102.80 | 116.31 | 112.10 | 102.28 | 90.86 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 102.80 | 116.31 | 112.10 | 102.28 | 90.86 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 102.80 + — – —
= 102.80
The cash conversion cycle of NOV Inc. has shown a fluctuating trend over the past five years. Starting at 90.86 days on December 31, 2020, the cycle increased to 102.28 days by December 31, 2021, indicating a longer period required to convert resources into cash.
Subsequently, on December 31, 2022, the cash conversion cycle further extended to 112.10 days, signifying potential challenges in efficiently managing cash flows. By December 31, 2023, the cycle continued to rise to 116.31 days, reaching its peak in the analyzed period.
However, on December 31, 2024, there was a notable improvement as the cash conversion cycle decreased to 102.80 days compared to the previous year. This reduction suggests enhanced effectiveness in converting inventories into sales and eventually into cash.
It is essential for NOV Inc. to closely monitor its cash conversion cycle to ensure optimal management of working capital and liquidity, which are crucial for sustaining operations and supporting growth in the competitive business landscape.
Peer comparison
Dec 31, 2024