Schlumberger NV (SLB)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 0.16 | 0.17 | 0.20 | 0.22 | 2.50 |
| Receivables turnover | 4.18 | 4.10 | 4.21 | 4.41 | 4.17 |
| Payables turnover | 0.16 | 0.17 | 0.20 | 0.25 | 2.16 |
| Working capital turnover | 7.55 | 9.28 | 9.76 | 9.53 | 13.28 |
The activity ratios of Schlumberger Ltd. provide insights into the efficiency of the company's operations and its management of working capital.
Starting with the inventory turnover, the trend shows a slight decline from 2019 to 2023, indicating a decrease in the frequency of inventory being sold and replaced within the given period. This may be attributed to various factors such as changes in demand, supply chain disruptions, or inventory management strategies.
The receivables turnover ratio reflects the effectiveness of the company in collecting outstanding receivables from its customers. The trend indicates a relatively stable performance over the years, with a slight increase in 2023 compared to 2019. This suggests that Schlumberger has been maintaining a consistent level of efficiency in collecting payments from its credit sales.
The payables turnover ratio reveals how efficiently the company manages its trade credit with suppliers. The trend shows a fluctuating pattern, with a notable decrease in 2020 followed by a gradual recovery in the subsequent years. This could reflect changes in payment terms with suppliers or variations in purchasing processes.
The working capital turnover ratio measures the efficiency of using working capital to generate revenue. The decreasing trend from 2019 to 2023 suggests that Schlumberger's ability to generate sales from its working capital has weakened over the years. This may indicate a need for closer management of the company's operating assets and liabilities to improve overall efficiency.
Overall, the analysis of Schlumberger Ltd.'s activity ratios reveals both strengths and areas for potential improvement in the management of inventory, receivables, payables, and working capital to enhance operational efficiency and optimize the utilization of resources.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 2,214.74 | 2,156.03 | 1,863.15 | 1,663.33 | 145.93 |
| Days of sales outstanding (DSO) | days | 87.38 | 89.13 | 86.64 | 82.76 | 87.52 |
| Number of days of payables | days | 2,328.83 | 2,113.98 | 1,825.00 | 1,456.53 | 169.25 |
The activity ratios of Schlumberger Ltd. indicate the efficiency of the company in managing its operational assets and liabilities over the last five years.
The days of inventory on hand (DOH) measure the average number of days it takes for the company to sell its inventory. Schlumberger's DOH has shown a fluctuating trend, with a slight increase from 2020 to 2022, followed by a decrease in 2023. This suggests that the company may have improved its inventory management efficiency in 2023.
The days of sales outstanding (DSO) reflect the average number of days it takes for the company to collect its accounts receivable from its customers. Schlumberger's DSO increased from 2021 to 2022, before showing a further increase in 2023. This indicates that the company is taking longer to collect its receivables, which could suggest less efficient credit and collection policies.
The number of days of payables measures the average number of days it takes for the company to pay its suppliers. Schlumberger's days of payables have fluctuated over the past five years, with a notable increase in 2020. This suggests that the company may have taken longer to pay its suppliers that year.
Overall, while Schlumberger's inventory management appears to have improved in 2023, there are signs of deteriorating efficiency in collecting receivables and paying suppliers, which could impact its working capital management and cash flow.
See also:
Schlumberger NV Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.51 | 4.19 | 3.39 | 3.39 | 3.49 |
| Total asset turnover | 0.68 | 0.64 | 0.54 | 0.55 | 0.57 |
The long-term activity ratios provide insights into Schlumberger Ltd.'s efficiency in utilizing its fixed and total assets to generate sales. The fixed asset turnover ratio indicates the company's ability to generate sales from its investments in property, plant, and equipment. Over the past five years, the fixed asset turnover ratio has exhibited a generally increasing trend, reaching 4.58 in 2023 from 3.55 in 2019. This suggests that Schlumberger has been more effective in generating revenue from its fixed assets over time.
Similarly, the total asset turnover ratio reflects the company's ability to generate sales from all its assets, including both fixed and current assets. The trend in the total asset turnover ratio shows an improvement from 0.58 in 2019 to 0.69 in 2023. This indicates that Schlumberger has been successful in increasing its sales in relation to its total asset base over the years.
Overall, the increasing trend in both the fixed asset turnover and total asset turnover ratios indicates an improving efficiency in utilizing assets to generate sales, which may reflect positively on the company's operational performance and management of its asset base.