Schlumberger NV (SLB)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 32,632,000 | 27,708,000 | 22,390,000 | 23,142,000 | 32,308,000 |
| Total current assets | US$ in thousands | 17,718,000 | 15,003,000 | 12,654,000 | 12,919,000 | 15,530,000 |
| Total current liabilities | US$ in thousands | 13,395,000 | 12,018,000 | 10,359,000 | 10,491,000 | 13,098,000 |
| Working capital turnover | 7.55 | 9.28 | 9.76 | 9.53 | 13.28 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $32,632,000K ÷ ($17,718,000K – $13,395,000K)
= 7.55
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue. A higher ratio generally indicates more efficient use of working capital.
Based on the data provided, Schlumberger Ltd.'s working capital turnover has exhibited a declining trend over the past five years. In 2019, the ratio was at its highest at 13.53, indicating strong efficiency in converting working capital into sales. However, the ratio has steadily decreased in subsequent years, reaching 7.66 in 2023.
The decreasing trend in working capital turnover may suggest potential inefficiencies in utilizing the company's working capital to generate sales. It could be indicative of slower inventory turnover or longer receivables collection periods, which may warrant further investigation into the company's operational and liquidity management strategies.
It is important to note that while a declining trend in working capital turnover can raise concerns, it should be analyzed in conjunction with other financial indicators and operational factors to gain a comprehensive understanding of the company's financial performance and efficiency.
Peer comparison
Dec 31, 2023