Valaris Ltd (VAL)

Short-term

Turnover ratios

Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory.
- Valaris Ltd's inventory turnover has shown fluctuation over the years.
- A significant increase in inventory turnover from 7.20 in 2020 to 60.43 in 2022 indicates that Valaris Ltd is selling goods at a much faster rate.
- However, there was a drastic drop to 10.08 in 2023, which could imply potential issues in managing inventory levels efficiently.
- There is missing data for 2024, which limits further analysis for that year.

Receivables Turnover:
- Receivables turnover ratio indicates how efficiently a company is collecting its accounts receivable.
- In this case, there is no available data for receivables turnover for any of the years, which makes it challenging to assess Valaris Ltd's ability to collect payments from customers promptly.

Payables Turnover:
- The payables turnover ratio evaluates how quickly a company pays its suppliers.
- Similar to receivables turnover, there is no data provided for payables turnover for any of the years. Without this information, it is difficult to gauge Valaris Ltd's payment practices to its suppliers.

Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales.
- Valaris Ltd's working capital turnover has generally been increasing over the years, indicating improved efficiency in utilizing working capital.
- The ratio has gone from 1.91 in 2020 to 5.92 in 2024, demonstrating a strong ability to generate sales relative to its working capital.
- The trend suggests that Valaris Ltd has been able to grow its revenue using its existing working capital effectively.

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Average number of days

Based on the provided data on Valaris Ltd's activity ratios, we can analyze the company's efficiency in managing its inventory, sales outstanding, and payables.

1. Days of Inventory on Hand (DOH):
- In December 2020, Valaris had an inventory turnover of approximately 50.71 days.
- Over the years, the company has shown significant improvement in inventory management, with the DOH decreasing to 10.10 days in December 2021 and further to 6.04 days in December 2022. This indicates that the company is efficiently managing its inventory levels, turning over goods more quickly.
- The DOH increased to 36.22 days in December 2023, suggesting a slight slowdown in inventory turnover compared to the previous year.
- Unfortunately, there is no data available for December 2024 to provide the latest DOH figure.

2. Days of Sales Outstanding (DSO):
- There is no data available for DSO for any of the years, indicating that the company did not provide information on its average collection period for accounts receivable.

3. Number of Days of Payables:
- Similar to DSO, there is no data available for the number of days of payables for any of the years, implying that the company did not disclose its average payment period for accounts payable.

In summary, based on the data provided, Valaris Ltd has demonstrated a notable improvement in managing its inventory turnover over the years. However, the lack of information on sales outstanding and payables hinders a comprehensive analysis of the company's overall efficiency in managing its operating cycle.

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Long-term

The fixed asset turnover ratio for Valaris Ltd has shown significant improvement over the years, increasing from 0.13 in 2020 to 1.64 in 2022. This indicates that the company is generating more revenue for each dollar invested in fixed assets, reflecting improved efficiency in utilizing its long-term assets.

On the other hand, the total asset turnover ratio has also demonstrated an upward trend, rising from 0.11 in 2020 to 0.53 in 2024. This suggests that Valaris is generating more sales relative to its total assets, which implies improved asset utilization and efficiency in generating revenue.

Overall, both the fixed asset turnover and total asset turnover ratios show positive trends, signaling enhanced operational efficiency and effective management of long-term assets by Valaris Ltd over the years. These improvements are favorable indicators of the company's ability to generate revenue and maximize its asset base.