Valaris Ltd (VAL)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,743,100 | 365,000 | 4,587,100 | 2,098,900 | 901,000 |
| Payables | US$ in thousands | 400,100 | 256,500 | 176,400 | 288,200 | 210,500 |
| Payables turnover | 4.36 | 1.42 | 26.00 | 7.28 | 4.28 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,743,100K ÷ $400,100K
= 4.36
The payables turnover ratio for Valaris Ltd has been fluctuating over the past three years. In 2023, the payables turnover ratio decreased to 3.86 from 5.39 in 2022, indicating that the company took longer to pay its suppliers compared to the previous year. This could be a red flag suggesting potential liquidity issues or changes in the company's payment terms. However, the payables turnover ratio of 3.86 is still higher than the 2021 ratio of 4.75, which implies that Valaris Ltd improved its efficiency in managing its accounts payable in 2023 compared to 2021. Further analysis is necessary to understand the underlying reasons behind these fluctuations and their impact on the company's financial health.
Peer comparison
Dec 31, 2023