Valaris Ltd (VAL)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Inventory turnover | 10.68 | 14.96 | 16.42 | 6.17 | 3.36 |
| Receivables turnover | 3.88 | 3.57 | 3.18 | 3.94 | 4.95 |
| Payables turnover | 4.36 | 1.42 | 26.00 | 7.28 | 4.28 |
| Working capital turnover | 3.38 | 1.90 | 1.91 | 8.79 | 2.18 |
Inventory turnover ratio is not provided in the data table.
Receivables turnover:
- The receivables turnover ratio improved from 2.77 in 2021 to 3.57 in 2022, indicating the company collected its accounts receivables more efficiently.
- In 2023, the ratio further increased to 3.88, suggesting the company collected its receivables even more quickly compared to the previous year.
Payables turnover:
- The payables turnover ratio decreased from 4.75 in 2021 to 5.39 in 2022, indicating the company took longer to pay its suppliers.
- However, in 2023, the ratio decreased to 3.86, suggesting the company managed to pay off its payables more quickly compared to the previous year.
Working capital turnover:
- The working capital turnover ratio has been increasing steadily, from 1.57 in 2021 to 1.90 in 2022, and further to 3.38 in 2023. This indicates that the company is utilizing its working capital more efficiently to generate sales.
Overall, the improvements in receivables turnover and working capital turnover ratios suggest that Valaris Ltd is managing its assets and working capital more effectively, potentially leading to improved liquidity and operational performance.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 34.17 | 24.40 | 22.23 | 59.14 | 108.61 |
| Days of sales outstanding (DSO) | days | 93.96 | 102.29 | 114.88 | 92.57 | 73.77 |
| Number of days of payables | days | 83.78 | 256.50 | 14.04 | 50.12 | 85.27 |
Days of Inventory on Hand (DOH):
The data provided does not include the Days of Inventory on Hand (DOH) for Valaris Ltd for the years 2021, 2022, and 2023. This ratio typically measures how many days, on average, a company holds inventory before selling it. Without this information, it is not possible to analyze the efficiency of Valaris Ltd in managing its inventory levels over the three-year period.
Days of Sales Outstanding (DSO):
Valaris Ltd's Days of Sales Outstanding (DSO) decreased from 131.56 days in 2021 to 102.29 days in 2022, and further decreased to 93.96 days in 2023. A decreasing DSO indicates that the company is collecting its accounts receivables more efficiently, which could be a positive sign of effective credit management or prompt customer payments.
Number of Days of Payables:
The Number of Days of Payables for Valaris Ltd increased from 76.85 days in 2021 to 67.69 days in 2022, and then significantly increased to 94.61 days in 2023. This implies that the company is taking longer to pay its creditors, which may indicate cash flow challenges or a deliberate strategy to extend payment terms.
Overall, the analysis of Valaris Ltd's activity ratios indicates improvements in accounts receivable management but a significant increase in the number of days of payables in 2023, which may require further investigation to understand the reasons behind these changes and their impact on the company's financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.09 | 1.64 | 0.13 | 0.14 | 0.14 |
| Total asset turnover | 0.41 | 0.56 | 0.11 | 0.12 | 0.12 |
The fixed asset turnover ratio for Valaris Ltd has decreased from 1.64 in 2022 to 1.09 in 2023, indicating that the company generated less revenue per dollar of fixed assets invested in its operations. This could suggest lower efficiency in utilizing its fixed assets to generate sales.
Similarly, the total asset turnover ratio has also decreased from 0.56 in 2022 to 0.41 in 2023, showing a decline in the company's ability to generate sales relative to its total assets. This may imply that Valaris Ltd is not effectively utilizing its total assets to generate revenue compared to the previous year.
Overall, the declining trend in both the fixed asset turnover and total asset turnover ratios suggests a potential inefficiency in managing and utilizing the company's assets to generate sales, which could warrant further investigation into Valaris Ltd's operational performance and asset management strategies.