Weatherford International PLC (WFRD)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 4.13 | 4.38 | 4.42 | 4.46 | 3.99 | |
| DSO | days | 88.36 | 83.35 | 82.61 | 81.82 | 91.43 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.13
= 88.36
To analyze Weatherford International plc's days of sales outstanding (DSO) over the past three years:
1. There has been a slight increase in DSO from 82.61 days in 2021 to 83.35 days in 2022, and further to 86.43 days in 2023. This trend indicates that the company is taking longer to collect its accounts receivable, which could potentially impact its cash flow and working capital management.
2. The increase in DSO suggests that Weatherford International plc may be facing challenges in collecting payments from customers in a timely manner. This could be due to various reasons such as changes in customer payment behavior, extended credit terms, or difficulties in the collection process.
3. A high DSO figure may indicate a need for the company to reevaluate its credit policies, improve collections processes, or strengthen relationships with customers to expedite payment cycles and enhance liquidity.
4. It is important for Weatherford International plc to closely monitor its DSO and implement strategies to optimize its accounts receivable management to ensure a healthy cash flow position and operational efficiency.
In conclusion, the increasing trend in Weatherford International plc's days of sales outstanding over the past three years signals a need for the company to address its accounts receivable collection efficiency to sustain financial health and performance.
Peer comparison
Dec 31, 2023