Patterson-UTI Energy Inc (PTEN)
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 | 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 |
| Cash conversion cycle | days | -112.00 | -320.72 | -443.52 | -272.54 | 15.50 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 108.71 + 53.52 – 274.23
= -112.00
Patterson-UTI Energy Inc has exhibited a significant improvement in its cash conversion cycle over the years. As of December 31, 2020, the company's cash conversion cycle was 15.50 days, indicating a relatively efficient cash management process.
However, there has been a notable transformation in the cash conversion cycle performance in subsequent years, with the cycle turning negative. By December 31, 2021, the cycle had decreased to -272.54 days, suggesting that the company was able to convert its investments into cash at a much faster rate than in 2020.
The trend continued in the following years, with the cash conversion cycle further decreasing to -443.52 days by December 31, 2022, and reaching -320.72 days by December 31, 2023. This negative cycle indicates that Patterson-UTI Energy Inc was effectively managing its working capital, inventory, and receivables, resulting in quicker cash flows.
By December 31, 2024, the cash conversion cycle stood at -112.00 days, reflecting the company's continued efficiency in managing its cash conversion process. This improvement could be attributed to streamlined operations, enhanced inventory management, and effective credit control measures.
Overall, the negative cash conversion cycle figures suggest that Patterson-UTI Energy Inc has been successful in optimizing its cash flow operations, enhancing liquidity, and potentially improving its overall financial performance across the years.
Peer comparison
Dec 31, 2024