Weatherford International PLC (WFRD)
Payables 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 |
| Payables | US$ in thousands | 679,000 | 460,000 | 380,000 | 325,000 | 585,000 |
| Payables turnover | 0.68 | 0.68 | 0.84 | 5.86 | 6.59 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $463,000K ÷ $679,000K
= 0.68
The payables turnover ratio of Weatherford International plc has been declining over the past three years. In 2021, the ratio was 7.15, indicating that the company paid off its accounts payable approximately 7.15 times during the year. This ratio decreased to 6.57 in 2022 and further dropped to 5.00 in 2023.
The decreasing trend in payables turnover could suggest that Weatherford International plc is taking longer to pay off its suppliers' invoices, which may result from cash flow constraints, negotiating longer credit terms with suppliers, or other operational challenges. A lower payables turnover ratio could also indicate inefficiencies in managing accounts payable effectively.
It is essential for the company to monitor and address the reasons for the declining payables turnover ratio to ensure efficient management of its suppliers' payments and maintain good relationships with vendors. Additionally, a low payables turnover ratio may impact cash flow management and liquidity position, emphasizing the importance of evaluating and improving the company's payables management practices.
Peer comparison
Dec 31, 2023