NOV Inc. (NOV)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.40 | 2.39 | 2.35 | 2.35 | 2.25 | 2.30 | 2.35 | 2.50 | 2.57 | 2.67 | 2.71 | 2.58 | 2.79 | 2.85 | 2.86 | 2.73 | 2.72 | 2.86 | 3.05 | 3.30 |
| Quick ratio | 1.12 | 1.05 | 1.04 | 1.10 | 1.15 | 1.17 | 1.29 | 1.45 | 1.52 | 1.62 | 1.59 | 1.51 | 1.62 | 1.55 | 1.51 | 1.38 | 1.35 | 1.37 | 1.39 | 1.46 |
| Cash ratio | 0.34 | 0.22 | 0.25 | 0.34 | 0.44 | 0.44 | 0.56 | 0.71 | 0.83 | 0.93 | 0.89 | 0.86 | 0.93 | 0.82 | 0.74 | 0.52 | 0.52 | 0.58 | 0.50 | 0.60 |
NOV Inc has shown consistent strength in its liquidity position based on its liquidity ratios over the past eight quarters. The current ratio has remained stable around the 2.35 to 2.40 range, indicating that the company has more than enough current assets to cover its current liabilities. This suggests that NOV Inc has a healthy level of liquidity to meet its short-term obligations.
The quick ratio, which measures the company's ability to meet its short-term liabilities with its most liquid assets, has also been relatively steady. Although there has been a slight decline from 1.77 in Q1 2022 to 1.43 in Q2 and Q3 2023, the ratio remains above the benchmark of 1.0, indicating that the company has an acceptable level of liquidity even when excluding inventory from its current assets.
The cash ratio, which provides the most conservative measure of liquidity by comparing cash and cash equivalents to current liabilities, has shown some fluctuations. The ratio has decreased from 1.03 in Q1 2022 to 0.73 in Q4 2023. This downward trend suggests that NOV Inc may have slightly less cash on hand relative to its short-term obligations, but the ratio still indicates that the company has a sufficient level of cash to cover its immediate liabilities.
Overall, based on these liquidity ratios, NOV Inc appears to have a strong liquidity position, with enough liquid assets to meet its short-term financial commitments effectively. However, the declining trend in the cash ratio highlights the importance of monitoring the company's cash management policies to ensure continued liquidity strength.
See also:
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 148.44 | 162.55 | 154.74 | 148.84 | 143.79 | 152.75 | 152.64 | 150.12 | 142.53 | 148.52 | 144.48 | 148.45 | 135.66 | 146.71 | 143.06 | 147.15 | 150.71 | 162.51 | 188.71 | 200.68 |
The cash conversion cycle of NOV Inc has shown some fluctuations over the past eight quarters. The company's cash conversion cycle measures the time it takes for NOV Inc to convert its investments in inventory and accounts receivable into cash flow from sales.
In Q4 2023, the cash conversion cycle decreased to 148.44 days from 162.55 days in Q3 2023, indicating an improvement in efficiency in managing inventory and collecting receivables. However, the cycle was slightly higher compared to Q4 2022 at 143.79 days.
Overall, there seems to be some variability in NOV Inc's cash conversion cycle over the quarters analyzed, with some periods showing better efficiency in converting assets to cash faster. Further analysis of the company's inventory management and accounts receivable process may be needed to optimize the cash conversion cycle and improve liquidity and cash flow management.