Patterson-UTI Energy Inc (PTEN)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 560,768 | 315,899 | 119,958 | 145,360 | 533,663 |
| Inventory | US$ in thousands | 167,023 | 180,805 | 65,377 | 42,359 | 33,085 |
| Inventory turnover | 3.36 | 1.75 | 1.83 | 3.43 | 16.13 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $560,768K ÷ $167,023K
= 3.36
The inventory turnover ratio for Patterson-UTI Energy Inc has experienced a significant decline over the years. In 2020, the ratio stood at a robust 16.13, indicating that the company efficiently turned over its inventory approximately 16 times during that year. However, there was a substantial decrease in inventory turnover to 3.43 in 2021, followed by a further decline to 1.83 in 2022 and 1.75 in 2023, signaling potential inventory management challenges or slower sales.
The slight improvement to 3.36 in 2024 suggests some recovery in the efficiency of inventory turnover, although the ratio remains significantly below the levels seen in prior years. A lower inventory turnover ratio may imply possible excess inventory levels, slower sales, or obsolete inventory issues, which could tie up capital and affect profitability.
Patterson-UTI Energy Inc may need to reassess its inventory management practices, such as optimizing its ordering process, improving demand forecasting, or implementing inventory control measures to enhance the efficiency of its inventory turnover and potentially boost its financial performance in the future.
Peer comparison
Dec 31, 2024