Valaris Ltd (VAL)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,362,600 | 1,784,200 | 1,602,500 | 1,232,000 | 1,427,200 |
| Total current assets | US$ in thousands | 1,078,700 | 1,272,200 | 1,346,200 | 1,206,600 | 1,172,900 |
| Total current liabilities | US$ in thousands | 679,500 | 744,300 | 504,400 | 422,000 | 426,800 |
| Working capital turnover | 5.92 | 3.38 | 1.90 | 1.57 | 1.91 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,362,600K ÷ ($1,078,700K – $679,500K)
= 5.92
The working capital turnover ratio reflects how efficiently Valaris Ltd is utilizing its working capital to generate sales revenue. The trend analysis of the working capital turnover ratio over the past five years shows fluctuations in the efficiency of working capital management.
In December 31, 2020, the working capital turnover ratio was 1.91, indicating that for every $1 of working capital invested, the company generated $1.91 in sales revenue. However, by December 31, 2021, the ratio decreased to 1.57, implying a slight decrease in the efficiency of working capital utilization.
Despite the dip in 2021, the efficiency improved in the following years. By December 31, 2022, the working capital turnover ratio increased to 1.90, showing a better utilization of working capital to drive sales. This trend continued in December 31, 2023, where the ratio surged to 3.38, suggesting a significant improvement in working capital efficiency.
The most substantial increase in efficiency was observed in December 31, 2024, with a working capital turnover ratio of 5.92. This signifies that Valaris Ltd was able to generate $5.92 in sales revenue for every dollar of working capital invested, demonstrating a remarkable enhancement in working capital management efficiency.
In conclusion, despite temporary fluctuations, the trend of the working capital turnover ratio indicates an overall improvement in the efficient utilization of working capital by Valaris Ltd to drive sales revenue over the past five years.
Peer comparison
Dec 31, 2024