Patterson-UTI Energy Inc (PTEN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.36 | 1.75 | 1.83 | 3.43 | 16.13 |
| Receivables turnover | 6.82 | 4.15 | 4.63 | 3.70 | 6.62 |
| Payables turnover | 1.33 | 0.59 | 0.51 | 0.76 | 5.86 |
| Working capital turnover | 11.86 | 9.53 | 9.41 | 8.91 | 5.34 |
Patterson-UTI Energy Inc's activity ratios provide insight into how efficiently the company manages its resources related to sales, inventory, receivables, payables, and working capital.
1. Inventory Turnover: There has been a notable decline in the inventory turnover ratio from 16.13 in 2020 to 1.75 in 2023, indicating that the company is selling its inventory at a slower pace. However, there was a slight improvement in 2024 to 3.36, although it remained well below the 2020 level. This may suggest potential issues with inventory management or sales performance.
2. Receivables Turnover: The receivables turnover ratio decreased from 6.62 in 2020 to 4.15 in 2023, signifying a slower collection of receivables from customers. However, there was a positive trend in 2024 with a ratio of 6.82, showing an improvement in collecting receivables efficiently.
3. Payables Turnover: The payables turnover ratio shows a significant decrease from 5.86 in 2020 to 0.59 in 2023, indicating a slowdown in paying off suppliers. There was a slight improvement in 2024, with a ratio of 1.33. A low payables turnover may suggest that the company is taking longer to settle its payables.
4. Working Capital Turnover: The working capital turnover ratio demonstrates how efficiently the company utilizes its working capital to generate sales. The ratios have shown an increasing trend from 5.34 in 2020 to 11.86 in 2024, indicating a positive sign of effective utilization of working capital to support revenue generation and operational activities.
In summary, the company may need to focus on optimizing its inventory management, improving receivables collection, and better managing payables to enhance operational efficiency and overall financial performance. The increasing trend in working capital turnover is a positive indication of efficient capital utilization.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 108.71 | 208.91 | 198.92 | 106.36 | 22.63 |
| Days of sales outstanding (DSO) | days | 53.52 | 87.85 | 78.86 | 98.74 | 55.12 |
| Number of days of payables | days | 274.23 | 617.49 | 721.30 | 477.64 | 62.26 |
The activity ratios for Patterson-UTI Energy Inc indicate the efficiency of the company in managing its working capital and operating cycle.
1. Days of Inventory on Hand (DOH):
- The Days of Inventory on Hand measures how long, on average, it takes for the company to sell its inventory.
- Patterson-UTI Energy Inc's DOH has shown a significant increase from 22.63 days in 2020 to 208.91 days in 2023, before decreasing to 108.71 days in 2024. This indicates fluctuations in inventory management efficiency over the years.
2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding represents how long it takes for the company to collect payment from its customers after making sales.
- Patterson-UTI Energy Inc's DSO has varied, with a decrease from 55.12 days in 2020 to 53.52 days in 2024. This suggests improvement in the company's accounts receivable collection efficiency.
3. Number of Days of Payables:
- The Number of Days of Payables reflects how long the company takes to pay its suppliers and vendors.
- The data shows a drastic increase in the number of days of payables from 62.26 days in 2020 to 721.30 days in 2022, before dropping to 274.23 days in 2024. This pattern indicates changes in the company's payment practices and relationships with suppliers.
In conclusion, Patterson-UTI Energy Inc's activity ratios highlight varying levels of efficiency in managing its inventory, accounts receivable, and accounts payable over the years. Monitoring these ratios can provide insights into the company's operational performance and financial health.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.79 | 1.24 | 1.16 | 0.56 | 0.39 |
| Total asset turnover | 0.92 | 0.56 | 0.83 | 0.45 | 0.33 |
Patterson-UTI Energy Inc's long-term activity ratios indicate improvements over the years. The fixed asset turnover ratio has shown a steady increase from 0.39 in 2020 to 1.79 in 2024. This suggests that the company has been able to generate more revenue per fixed asset invested, indicating improved efficiency in asset utilization.
Similarly, the total asset turnover ratio has also depicted a positive trend, increasing from 0.33 in 2020 to 0.92 in 2024. This indicates that the company has been more effective in generating sales relative to its total assets. However, the ratio fluctuated in the interim years, suggesting potential challenges in managing asset turnover efficiency during those periods.
Overall, the upward trajectory in both fixed asset turnover and total asset turnover ratios showcases Patterson-UTI Energy Inc's enhanced operational effectiveness and better utilization of its assets to generate revenue over the analyzed period.