Valaris Ltd (VAL)
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 | 34.64 | 4.05 | 6.21 | 11.13 | 26.13 | 217.70 | 31.94 | 200.30 | — | — | — | 39.97 | 22.22 | 22.39 | 22.69 | 27.59 | 102.14 | 143.76 | 177.98 | 149.31 |
| Days of sales outstanding (DSO) | days | 93.96 | 103.65 | 100.69 | 83.77 | 102.29 | 132.57 | 145.74 | 139.02 | 141.96 | 146.82 | 145.81 | 128.49 | 114.88 | 95.47 | 69.47 | 85.56 | 92.57 | 106.67 | 126.11 | 67.58 |
| Number of days of payables | days | 84.91 | 94.06 | 125.69 | 167.80 | 274.71 | 362.74 | 385.13 | 494.72 | 75.53 | 55.99 | 45.87 | 26.20 | 14.03 | 13.80 | 11.37 | 23.08 | 86.55 | 135.18 | 165.40 | 121.23 |
| Cash conversion cycle | days | 43.68 | 13.64 | -18.79 | -72.90 | -146.29 | -12.47 | -207.45 | -155.40 | 66.43 | 90.83 | 99.93 | 142.26 | 123.07 | 104.06 | 80.78 | 90.07 | 108.15 | 115.25 | 138.69 | 95.65 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 34.64 + 93.96 – 84.91
= 43.68
The cash conversion cycle of Valaris Ltd has exhibited fluctuations over the past five quarters. In Q4 2023, the company's cash conversion cycle was -0.65 days, indicating that it was able to convert its investments in inventory and receivables into cash more quickly than its payables came due. This may suggest efficient management of working capital during that period.
In the previous quarter, Q3 2023, the cash conversion cycle increased to 11.75 days, which could imply a slowdown in the conversion of inventory and receivables into cash compared to the payment of payables. This increase may indicate potential inefficiencies in managing working capital.
Before Q3 2023, in Q2 2023, the cash conversion cycle was 8.42 days, showing an improvement from the previous quarter. This suggests that the company was able to more efficiently manage its working capital during that period.
In Q1 2023, the cash conversion cycle was 0.99 days, indicating a relatively short period for converting investments in inventory and receivables into cash compared to the payment of payables, which may suggest effective working capital management during that quarter.
Lastly, in Q4 2022, the cash conversion cycle was 34.61 days, reflecting a longer period for cash conversion compared to the other quarters analyzed. This could indicate potential inefficiencies in working capital management during that period.
Overall, the analysis of Valaris Ltd's cash conversion cycle reveals fluctuations in working capital efficiency over the past five quarters, with periods of both improvement and potential inefficiencies. Monitoring and analyzing these trends can help the company assess its working capital management practices and make appropriate adjustments to optimize its cash conversion cycle.
Peer comparison
Dec 31, 2023