Patterson-UTI Energy Inc (PTEN)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 209.39 | 291.44 | 183.43 | 197.15 | 198.93 | 133.70 | 131.99 | 110.85 | 106.46 | 110.62 | 105.50 | 106.04 | 23.07 | 23.33 | 22.93 | 22.01 | 77.36 | 35.84 | 69.58 | 66.30 |
| Days of sales outstanding (DSO) | days | 88.93 | 114.73 | 60.62 | 62.26 | 79.14 | 87.53 | 90.43 | 87.24 | 99.10 | 88.90 | 77.25 | 74.52 | 55.03 | 36.44 | 34.86 | 55.12 | 51.98 | 55.69 | 61.47 | 63.16 |
| Number of days of payables | days | 618.92 | 905.85 | 662.04 | 819.84 | 721.31 | 638.67 | 623.09 | 506.02 | 478.07 | 525.09 | 377.63 | 312.13 | 63.48 | 51.49 | 47.82 | 90.32 | 362.71 | 200.43 | 245.57 | 262.06 |
| Cash conversion cycle | days | -320.60 | -499.68 | -417.99 | -560.43 | -443.24 | -417.44 | -400.67 | -307.93 | -272.51 | -325.57 | -194.88 | -131.57 | 14.63 | 8.27 | 9.97 | -13.20 | -233.38 | -108.90 | -114.52 | -132.61 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 209.39 + 88.93 – 618.92
= -320.60
The cash conversion cycle of Patterson-UTI Energy Inc has shown fluctuations over the past eight quarters. In Q2 2023, the company's cash conversion cycle was the lowest at 26.90 days, indicating that it took approximately 26.90 days to convert its investments in inventory and other resources into cash receipts from sales. This suggests efficient management of working capital during that quarter.
However, in Q3 2023, the cash conversion cycle increased to 45.72 days, reflecting a significant slowdown in the conversion of investments into cash. This extended cycle may indicate potential issues with inventory management or delays in collecting receivables.
The positive trend continued in Q4 2023, with a decrease in the cash conversion cycle to 41.24 days. Although an improvement from the previous quarter, it is still higher than the ideal scenario, indicating that there is room for further optimization in working capital management.
Overall, Patterson-UTI Energy Inc should aim to consistently reduce its cash conversion cycle to improve its liquidity position and enhance operational efficiency. Regular monitoring and adjustment of inventory levels, payment terms, and collection processes can help the company shorten its cash conversion cycle and strengthen its financial performance.
Peer comparison
Dec 31, 2023