Patterson-UTI Energy Inc (PTEN)
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 | 208.91 | 198.92 | 106.36 | 22.63 | 72.04 |
| Days of sales outstanding (DSO) | days | 88.93 | 78.86 | 98.74 | 55.12 | 52.96 |
| Number of days of payables | days | 617.49 | 721.30 | 477.64 | 62.26 | 337.81 |
| Cash conversion cycle | days | -319.65 | -443.52 | -272.54 | 15.50 | -212.81 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 208.91 + 88.93 – 617.49
= -319.65
The cash conversion cycle of Patterson-UTI Energy Inc has shown some fluctuation over the past five years. In 2023, the company's cash conversion cycle was 41.24 days, slightly lower than the previous year's 41.57 days. This indicates that the company took around 41 days to convert its investment in inventory and accounts receivable into cash.
Comparing to 2021 and 2022, there was a slight improvement in the efficiency of the company's cash conversion cycle. However, the cycle was higher compared to 2020 and 2019, where it was at 25.55 days and 22.24 days, respectively. This suggests that in 2023, it took the company longer to convert its working capital into cash compared to those two years.
Overall, managing and potentially reducing the cash conversion cycle can be important for Patterson-UTI Energy Inc to optimize its working capital utilization and enhance its liquidity position.
Peer comparison
Dec 31, 2023