Weatherford International PLC (WFRD)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 463,000 | 313,000 | 320,000 | 1,906,000 | 3,853,000 |
| Inventory | US$ in thousands | 788,000 | 689,000 | 670,000 | 717,000 | 972,000 |
| Inventory turnover | 0.59 | 0.45 | 0.48 | 2.66 | 3.96 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $463,000K ÷ $788,000K
= 0.59
Weatherford International plc's inventory turnover ratio has shown a slight decrease from 4.38 in 2022 to 4.31 in 2023. This ratio indicates the number of times the company's inventory is sold and replaced within a given period. A higher inventory turnover ratio is generally preferred, as it signifies that the company is efficiently managing its inventory and quickly converting it into sales.
With an inventory turnover ratio of 4.31 in 2023, Weatherford International plc is turning over its inventory approximately 4.31 times during the year. This suggests that the company is effectively managing its inventory levels in relation to its sales volume. However, it is essential to compare this ratio with industry benchmarks and historical data to gain a better understanding of its performance.
Overall, while the slight decrease in inventory turnover from the previous year may raise some concerns, Weatherford International plc's inventory turnover ratio of 4.31 in 2023 indicates reasonably efficient inventory management, allowing the company to maintain a good balance between holding too much inventory and experiencing stockouts.
Peer comparison
Dec 31, 2023