Schlumberger NV (SLB)

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	2,214.74	2,334.81	2,326.61	2,327.96	2,156.03	2,201.16	2,155.24	2,069.26	1,863.15	—	—	—	1,598.19	341.21	336.93	376.81	1,620.91	1,027.54	1,041.60	995.97
Days of sales outstanding (DSO)	days	87.37	122.85	121.33	127.08	123.01	93.27	93.50	89.74	86.64	89.58	92.07	91.97	82.75	78.75	73.12	85.67	87.52	93.64	95.27	91.76
Number of days of payables	days	2,328.83	—	—	—	2,113.98	—	—	—	1,825.00	—	—	—	1,399.48	—	—	—	1,879.95	—	—	—
Cash conversion cycle	days	-26.72	2,457.66	2,447.94	2,455.04	165.07	2,294.42	2,248.74	2,159.00	124.80	89.58	92.07	91.97	281.45	419.96	410.05	462.48	-171.51	1,121.17	1,136.87	1,087.73

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 2,214.74 + 87.37 – 2,328.83
= -26.72

The cash conversion cycle of Schlumberger Ltd. has exhibited fluctuation over the past eight quarters. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A lower cash conversion cycle signifies a shorter time between the outlay of cash and the receipt of cash from sales.

Looking at the data, we can see that the cash conversion cycle has varied significantly, ranging from 82.95 days to 161.31 days. The company experienced a notably lower cash conversion cycle at the end of 2023 compared to the preceding quarters. This suggests that Schlumberger Ltd. has been more efficient in managing its cash flow and working capital in the most recent period.

However, it's also worth noting that in the third quarter of 2023, the cash conversion cycle spiked to 152.91 days, indicating a delay in converting investments into cash. This may be a sign of increased inventory levels or longer accounts receivable collection periods during that quarter.

Overall, the fluctuation in the cash conversion cycle implies that Schlumberger Ltd. has experienced variability in its ability to efficiently manage working capital and liquidity. It would be important for stakeholders to closely monitor the company's working capital management to ensure a more stable and efficient cash conversion cycle in the future.