Weatherford International PLC (WFRD)
Inventory turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 235,000 | 509,000 | 502,000 | 474,000 | 463,000 | 290,000 | 290,000 | 296,000 | 319,000 | 358,000 | 335,000 | 340,000 | 320,000 | 783,000 | 807,000 | 1,190,000 | 1,280,000 | 2,190,000 | 2,948,000 | 3,335,000 |
| Inventory | US$ in thousands | 880,000 | 919,000 | 884,000 | 850,000 | 788,000 | 776,000 | 751,000 | 719,000 | 689,000 | 723,000 | 716,000 | 684,000 | 670,000 | 681,000 | 662,000 | 676,000 | 717,000 | 811,000 | 862,000 | 1,004,000 |
| Inventory turnover | 0.27 | 0.55 | 0.57 | 0.56 | 0.59 | 0.37 | 0.39 | 0.41 | 0.46 | 0.50 | 0.47 | 0.50 | 0.48 | 1.15 | 1.22 | 1.76 | 1.79 | 2.70 | 3.42 | 3.32 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $235,000K ÷ $880,000K
= 0.27
Weatherford International PLC's inventory turnover has been declining over the years, indicating inefficiency in managing its inventory levels.
The inventory turnover ratio measures how many times a company sells and replaces its inventory during a certain period. A higher ratio typically indicates that the company is selling goods quickly and efficiently, whereas a lower ratio can suggest inefficiencies in inventory management or slow sales.
From March 2020 to December 2024, Weatherford International PLC's inventory turnover decreased steadily from 3.32 to 0.27. This significant decline may imply that the company is holding onto its inventory for a longer period before selling it, which could tie up cash and lead to potential obsolescence risks.
A sustained decrease in inventory turnover can also be a sign of overstocking, poor demand forecasting, or difficulties in aligning production with sales. It may also indicate challenges in managing supply chains effectively or responding promptly to changes in market demands.
Overall, the declining trend in Weatherford International PLC's inventory turnover suggests the need for the company to review its inventory management policies and practices to improve efficiency and optimize working capital utilization.
Peer comparison
Dec 31, 2024
Dec 31, 2024