Weatherford International PLC (WFRD)
Activity ratios
Short-term
Turnover ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 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 | 4.20 | 3.68 | 3.93 | 4.16 |
| Receivables turnover | 4.13 | 3.95 | 4.48 | 4.21 | 4.38 | 4.41 | 4.21 | 4.32 | 4.42 | 3.33 | 4.29 | 5.17 | 5.42 | 6.77 | 5.81 | 4.20 | 4.18 | 4.16 | 4.44 | 4.84 |
| Payables turnover | 0.68 | 0.47 | 0.58 | 0.59 | 0.69 | 0.84 | 0.75 | 0.88 | 0.84 | 2.24 | 2.32 | 3.61 | 3.94 | 6.60 | 7.68 | 6.13 | 6.98 | 6.61 | 5.77 | 5.86 |
| Working capital turnover | 3.40 | 3.35 | 3.18 | 2.99 | 2.75 | 2.43 | 2.40 | 2.36 | 2.31 | 1.58 | 1.78 | 2.28 | 2.47 | 3.01 | 3.59 | 2.92 | 2.91 | 9.77 | 10.53 | 6.19 |
The activity ratios of Weatherford International plc provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.
1. Inventory Turnover:
- The inventory turnover ratio has been relatively stable over the past eight quarters, ranging from 4.05 to 4.38.
- This indicates that Weatherford International is able to sell and replace its inventory approximately four times a year on average.
- A consistent inventory turnover ratio suggests effective inventory management, ensuring that the company is neither overstocked nor understocked.
2. Receivables Turnover:
- The receivables turnover ratio fluctuates slightly from quarter to quarter, with values ranging from 3.95 to 4.48.
- This ratio indicates how effectively the company collects payments from its customers.
- A higher receivables turnover ratio suggests that Weatherford International is efficient in collecting outstanding receivables.
3. Payables Turnover:
- The payables turnover ratio has been relatively stable, ranging from 5.00 to 7.17 over the past eight quarters.
- This ratio reflects how quickly the company pays its suppliers.
- The consistency in payables turnover indicates a consistent payment behavior towards suppliers.
4. Working Capital Turnover:
- The working capital turnover ratio varies across quarters, with values ranging from 2.36 to 3.47.
- This ratio measures how efficiently the company is utilizing its working capital to generate sales.
- A higher ratio indicates that Weatherford International is effectively using its working capital to support its operations and generate revenue.
Overall, the activity ratios of Weatherford International plc suggest that the company has been maintaining a good level of efficiency in managing its inventory, receivables, payables, and working capital over the analyzed quarters.
Average number of days
| 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 | 621.21 | 976.69 | 945.22 | 886.60 | 788.35 | 737.14 | 780.12 | 734.29 | 764.22 | 317.45 | 299.42 | 207.34 | 204.46 | 135.17 | 106.73 | 109.88 | 86.89 | 99.13 | 92.97 | 87.74 |
| Days of sales outstanding (DSO) | days | 88.36 | 92.39 | 81.40 | 86.73 | 83.35 | 82.79 | 86.77 | 84.46 | 82.61 | 109.58 | 85.03 | 70.67 | 67.31 | 53.89 | 62.82 | 86.97 | 87.38 | 87.70 | 82.18 | 75.43 |
| Number of days of payables | days | 535.28 | 780.34 | 631.83 | 619.02 | 526.33 | 433.31 | 488.12 | 413.31 | 433.44 | 163.15 | 157.40 | 101.22 | 92.68 | 55.33 | 47.54 | 59.54 | 52.30 | 55.20 | 63.21 | 62.34 |
To analyze Weatherford International plc's activity ratios based on the provided data:
1. Days of Inventory on Hand (DOH):
- The company's average DOH over Q4 2022 to Q4 2023 was 86.07 days, indicating that, on average, Weatherford holds inventory for about 86 days before selling.
- The trend shows a slight increase in DOH from Q4 2022 to Q2 2023, with a peak in Q3 2022 at 91.99 days, but a subsequent decrease.
- A high DOH may imply slow-moving inventory or inefficiencies in managing inventory levels, potentially leading to increased carrying costs and obsolescence risks.
2. Days of Sales Outstanding (DSO):
- The average DSO over Q4 2022 to Q4 2023 was 85.48 days, suggesting that Weatherford takes about 85 days to collect its receivables on average.
- DSO fluctuated throughout the period, with notable peaks in Q3 2023 and Q2 2022.
- A high DSO may indicate issues with credit policies or collection efficiency, potentially impacting cash flow and liquidity.
3. Number of Days of Payables:
- The company's average payables days over the period was 59.48 days, indicating that Weatherford takes approximately 59 days to settle its payables.
- Payables days slightly increased from Q4 2022 to Q3 2023 before decreasing in Q4 2023.
- A longer payment period may suggest favorable working capital management, as long as it is not indicative of delays or financial distress in meeting obligations.
Overall, Weatherford International plc's activity ratios suggest moderate efficiency in managing inventory, collecting receivables, and settling payables. Monitoring and potentially optimizing these ratios could enhance operational performance and cash flow management for the company.
Long-term
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 5.25 | 5.40 | 5.29 | 4.98 | 4.72 | 4.50 | 4.17 | 3.89 | 3.66 | 2.66 | 3.03 | 3.50 | 3.62 | 4.34 | 3.94 | 3.25 | 2.44 | 2.83 | 2.74 | 2.80 |
| Total asset turnover | 0.99 | 1.02 | 1.03 | 0.97 | 0.92 | 0.87 | 0.83 | 0.80 | 0.76 | 0.53 | 0.65 | 0.77 | 0.82 | 1.00 | 1.00 | 0.82 | 0.71 | 0.84 | 0.85 | 0.86 |
Weatherford International plc's long-term activity ratios provide insight into how effectively the company is utilizing its assets to generate revenue.
Fixed asset turnover, which measures how efficiently the company is using its fixed assets to generate sales, has shown a positive trend over the past eight quarters, increasing from 3.89 in Q1 2022 to 5.37 in Q4 2023. This indicates that Weatherford has been able to generate more sales relative to its investment in fixed assets, signaling operational efficiency and potentially effective capital allocation.
Total asset turnover, reflecting the company's overall efficiency in generating sales from all its assets, has also shown improvement, increasing from 0.80 in Q1 2022 to 1.01 in Q4 2023. This suggests that Weatherford has been able to generate more revenue for each dollar invested in total assets, which is a positive indicator of the company's asset utilization and operational performance.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that Weatherford International plc has been making better use of its assets to drive revenue growth and improve operational efficiency over the past eight quarters.