Schlumberger NV (SLB)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 0.28 | 0.16 | 0.17 | 0.20 | 0.22 |
| Receivables turnover | 4.53 | 4.18 | 4.10 | 4.21 | 4.41 |
| Payables turnover | 0.29 | 0.16 | 0.17 | 0.20 | 0.25 |
| Working capital turnover | 6.30 | 7.55 | 9.28 | 9.76 | 9.53 |
Based on the provided data, let's analyze Schlumberger NV's activity ratios:
1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Schlumberger NV's inventory turnover has been declining over the years, from 0.22 in 2020 to 0.16 in 2023, before experiencing a significant increase to 0.28 in 2024. A lower ratio indicates slower inventory turnover, which may suggest overstocking or declining demand for the company's products.
2. Receivables Turnover:
- The receivables turnover ratio reflects how efficiently a company collects its outstanding receivables. Schlumberger NV's receivables turnover has been relatively consistent, ranging from 4.10 to 4.53 over the years. A higher ratio signifies quicker collection of receivables, indicating effective credit management practices.
3. Payables Turnover:
- The payables turnover ratio indicates how quickly a company pays its suppliers. Schlumberger NV's payables turnover has followed a similar trend to inventory turnover, decreasing from 0.25 in 2020 to 0.16 in 2023, before increasing to 0.29 in 2024. A lower ratio suggests a longer payment period to suppliers, potentially indicating strained cash flow or negotiations for favorable terms.
4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue. Schlumberger NV's working capital turnover has gradually decreased from 9.53 in 2020 to 6.30 in 2024. A declining ratio may point towards inefficiencies in managing working capital or declining sales relative to the level of working capital invested.
In summary, Schlumberger NV's activity ratios depict varying trends in inventory management, receivables collection, payables payment, and working capital utilization over the years. Analyzing these ratios provides insights into the company's operational efficiency and effectiveness in managing its resources.
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 | 1,286.76 | 2,214.74 | 2,156.03 | 1,863.15 | 1,663.33 |
| Days of sales outstanding (DSO) | days | 80.58 | 87.38 | 89.13 | 86.64 | 82.76 |
| Number of days of payables | days | 1,244.12 | 2,328.83 | 2,113.98 | 1,825.00 | 1,456.53 |
Schlumberger NV's activity ratios, based on the provided data, reveal important insights into the efficiency of the company's operations.
1. Days of Inventory on Hand (DOH):
- Schlumberger NV's DOH has been increasing steadily over the years, indicating a longer time taken to sell its inventory. The company had 1,663.33 days of inventory on hand at the end of 2020, which rose to 2,214.74 days by the end of 2023 before decreasing to 1,286.76 days by the end of 2024. This suggests potential issues with inventory management efficiency that may impact profitability and cash flow.
2. Days of Sales Outstanding (DSO):
- The DSO measures how long it takes for Schlumberger NV to collect revenue after making a sale. The company's DSO also shows an increasing trend from 82.76 days in 2020 to 87.38 days in 2023 before decreasing to 80.58 days by the end of 2024. The rising DSO indicates a potential challenge in collecting receivables promptly, leading to cash flow constraints.
3. Number of Days of Payables:
- Schlumberger NV's number of days of payables shows an increasing trend, from 1,456.53 days in 2020 to 2,328.83 days in 2023 before dropping to 1,244.12 days by the end of 2024. A higher number of days of payables suggests that the company is taking more time to pay its suppliers, which could improve cash flow but might strain supplier relationships if not managed effectively.
Overall, the analysis of Schlumberger NV's activity ratios indicates potential inefficiencies in inventory management, receivables collection, and payables management. It would be beneficial for the company to focus on optimizing these processes to enhance operational efficiency and improve financial performance.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.93 | 4.51 | 4.19 | 3.39 | 3.39 |
| Total asset turnover | 0.74 | 0.68 | 0.64 | 0.54 | 0.55 |
The Fixed Asset Turnover ratio of Schlumberger NV has shown an increasing trend from 3.39 in 2020 to 4.93 in 2024. This indicates that the company has been able to generate more revenue from its fixed assets over the years.
Similarly, the Total Asset Turnover ratio has also been on the rise, increasing from 0.55 in 2020 to 0.74 in 2024. This suggests that Schlumberger NV has been more efficient in utilizing its total assets to generate sales.
Both ratios indicate an improvement in the company's long-term asset utilization efficiency, which is a positive sign as it demonstrates the company's ability to generate more revenue relative to its asset base.